With the cost of living, health insurance, and taxes all rising, saving for retirement as a freelancer can seem impossible.
Partly that’s because you’re a freelancer or small business owner you are fully responsible for it create your own retirement savings. Employees at large companies have some notable advantages in this area: Many employers offer 401(k) or 403(b) accounts for full-time workers. This allows employees to automatically contribute a portion of each paycheck before the money hits their account. These contributions are often tax-free, and some also match employee contributions up to a certain amount. The “set it and forget it” elements of this process make it much easier for employees to invest in their future retirement.
Partly because of these obstacles, a 2019 study by the Pew Charitable Trust found that only 13% of self-employed people in sole proprietorships put money in their retirement accounts, compared to 72% of employees in companies that offer retirement plans. But freelancers also need pension savings.
The good news is that the first few steps are the hardest, and once those are out of the way, freelancers can save for retirement in ways similar to those of corporate employees. If you’re a freelancer and want to start saving for retirement today, here are five tips to get you started:
Micro-investments
Apps like Acorns and Qapital help you invest small amounts of your account into a Roth IRA (individual retirement account). Imagine yourself when you paid for €4.25 coffee with €5 cash instead of your phone or a card. The barista gives you 75 cents in change. When you got home, you deposited your coins in a piggy bank where you gradually saved your change.
Micro-investing apps apply the same logic to digital payments. Automation makes pension investing easiersimilar to deducting money from your company salary. Plus, it’s satisfying to watch the small deposits add up over time. One warning: Acorns and Qapital will aggregate the small deposits and debit them from your account once a week. As a financial coach serving queer and transgender people in the US, I’ve seen many people living paycheck to paycheck risk overdrawing their accounts if Acorns automatically collects an unexpected amount of less than $15. If you choose this method, Make sure you have a solid buffer in your checking account to avoid overdrafts. Make sure the app is connected to a bank that is FDIC insured, so your deposits up to $250,000 are protected in case the app goes bankrupt. Most major banks are FDIC insured.
If you are self-employed or run a small business, you can open your own individual retirement account (IRA), a tax-advantaged account, meaning most contributions and investment gains are tax deductible. Some states have auto-IRAs that allow employees who do not have access to 401(k) state-sponsored retirement accounts through their employer to open.
As of October 2025, 12 state-sponsored IRAs include freelancers and solopreneurs:
Most of these states allow you to set up automatic transfers from your checking account to your retirement account. As an added bonus, you don’t have to transfer your benefits to another IRA if you change jobs or gigs.
Open an IRA or a 401(k) using a brokerage account
A brokerage account allows people to invest in stocks, bonds, mutual funds, exchange-traded funds (ETFs) and other investment vehicles. Some brokers also let you open different types of IRAs:
- A traditional IRA This allows you to contribute and invest pre-tax dollars. A traditional IRA also offers tax benefits, meaning contributing to a traditional IRA can reduce your taxable income. However, you will have to pay taxes if you withdraw money in retirement, and any withdrawals you make while you are under age 59 ½ will be subject to an additional 10% federal tax. You also must take out certain amounts (called required minimum distributions or RMDs) beginning at age 72, even if you’re still working.
- A Roth IRA This allows you to contribute and invest after-tax dollars, but not have to pay taxes when you withdraw money in retirement. Unlike a traditional IRA, investing in a Roth IRA will not reduce your taxable income. Additionally, there are no RMDs with Roth IRAs.
- A rollover IRA is where people typically transfer their 401(k) balances from previous employers
- A SEP IRA This allows you (as a sole proprietorship or your own employer) to deposit a maximum of 25% of your salary into your pension account.
- A SIMPLE IRA is for employers with up to 100 employees, including freelancers and solo entrepreneurs. Unlike a SEP IRA, a SIMPLE IRA (as your own employer) allows you to match your own retirement contributions.
You can open your own IRA at any time through brokerage firms including:
- Charles Schwab
- Fidelity
- Forefront
- Wealth front
Freelancers and solopreneurs can also open their own 401(k)s:
- Only a 401(k). This allows you to contribute up to €70,000 per year (up to €77,500 if you are over 50) with tax benefits as a freelancer or solo entrepreneur.
- Similar to a SIMPLE IRA, a SIMPLE 401(k) is for employers with up to 100 employees, including freelancers and solo entrepreneurs.
Discuss with your accountant which plan suits you best. Your accountant can also help you file the appropriate forms with the IRS when you are ready to open an account.
Match your own 401(k) and IRA contributions
As we’ve already mentioned, if you work for a company that offers a 401(k) match, the company can match your retirement contribution up to a certain percentage. For example, if your salary is $100,000 per year and you contribute 3%, you will deposit $3,000 into your retirement account over the course of the year. If your company matches your contribution, they will contribute an additional $3,000.
Freelancers can’t do this so easily because we work for ourselvesS. But as a sole proprietorship or single-owner LLC, you can set up your retirement accounts so that you, as your own employer, set up a company match for yourself as an employee.
Typically, freelancers take this step after paying off personal and business debts, building up enough savings for emergencies, and paying other contractors who support their business. It takes time to reach this point. Don’t rush into using this option now if you can’t afford it. But consider it a goal you can achieve later, and know that as a freelancer you can have a company match your retirement contributions.
Use the IRS contribution limits as goalposts
There are many pension calculators that help you understand how much you need to invest annually to retire comfortably. Spoiler alert: it’s a high number, especially if you don’t start investing in your retirement until your 40s and 50s.
In my financial coaching practice I see how overwhelming that large number can be for people. Instead of focusing on that, I suggest people use the IRS contribution limits as goalposts. For example, the Roth IRA contribution limit for 2026 is $7,500 per year for people under age 50. That’s a contribution of $625 per month.
If it feels like too much, try committing to 25% or 50% of the contribution limit. For example, 50% of the 2026 Roth IRA contribution limit is $312.50 per month. You can even break this down into twice-monthly deposits of $156.25.
When it comes to saving and investing, Learning a habit is more important than depositing a large amount of money in advance. Start small, try to make it bigger and watch your contributions grow. Soon you will look back and be glad you took these first steps.
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