Many self-employed medical and dental professionals can count themselves lucky because they’re living the dream of being their own boss. But sometimes being self-employed isn’t all it’s cracked up to be; it takes hard work and dedication to launch and maintain your own business.
This does not constitute advice and advice should be sought in all instances before acting on it.
One of the added stressors is figuring out the right plan to save for retirement as the onus falls completely on you if you’re self-employed.
In fact, according to a recent report from Demos supported by IPSE (the association for freelancers and self-employed) nearly half (46%) of respondents reported they were ‘seriously concerned’ about falling short with their savings.
So what are the options for self-employed and freelance workers looking to save for retirement? There are a few things you can do:
Check previous pensions
Even after you’ve left a company, you still have access to any pension funds you saved whilst in their employ. Some might even still allow you to continue contributing to the account even though you no longer work there and become self-employed.
Obviously, if your company matched your contribution you lose out on that, but you can still save however much you choose. There are only certain types of schemes that would allow this so you should get in touch with your provider to determine if that’s a viable option for you.
Combine pensions
Many people accumulate multiple pensions throughout their working life. It can be hard to manage different plans, so rather than potentially lose track of one, consider combining your multiple pensions into one pot.
Once merged, you can continue making contributions and better manage your savings, but it’s best to speak to a financial advisor at this stage to help determine the right level of savings for you.
Start a personal pension
By far the most popular method for retirement saving is a personal pension. However, there are so many to choose from and each one lets you choose your own provider and determine your investment contributions.
The return on your investments will depend on your initial contributions, investment performance, and fees, but you’ll definitely save on tax because your provider will automatically claim the basic-rate relief for you.
There are three types of personal pensions:
- Ordinary personal pension (offered by most large providers)
- Stakeholder pension (fee is usually capped at 1.5%)
- Self-invested personal pension (SIPP) (these offer more investment options, but fees are more costly)
When making your choice, you should consult with a professional. They can help you choose the right plan for you amongst the wealth of available plans.
NEST
Even though the National Employment Savings Trust (NEST) is a workplace pension scheme, you don’t need to be working for an employer to take advantage of it.
As long as you’re self-employed or the sole director of a one-man company you can participate. And the best part is that because it’s a trust, it runs solely for their own members and not any shareholders or owners. You can easily check your eligibility on the NEST website.
As you can see, you are spoilt for choice when it comes to retirement saving options. Some might even consider that making the right choice it a daunting task.
However, working with expert financial advisors like our team at Dental & Medical Financial Services, will help ease the burden.
We’ve been helping doctors and dentists prepare for their retirement for many years. And we’re happy to advise on the best financial route for you in order to fulfil your desired lifestyle, and recommend the best ways to achieve your goals.
Want to build & protect your wealth?
Investments | Financial Planning | Retirement | Save Tax | Protection |
Dental & Medical Financial Services have been helping doctors and dentists to build and protect their wealth, whilst saving tax for over 25 years.