October 22, 2014 | Megan Belt

Being your own boss sounds great, right? Setting your own hours, working from home, not having to answer to anyone. But, fast-forward to age 65—will you be able to retire and take the time to enjoy the things you’re working so hard to get?

According to TD Ameritrade’s Self-Employment and Retirement Survey. 70 percent of entrepreneurs, or those who are self-employed, say they are not saving for retirement on a regular basis—if at all. That’s troubling when you consider more than 10 million Americans call themselves the boss. 1 Self-employed Americans could find themselves working long into their golden years if they don’t make a change.

Working for yourself brings retirement trials “Being self-employed comes with its share of challenges and rewards, but it’s important that business owners not lose sight of the future,” advises Lule Demmissie, managing director of investment products and retirement for TD Ameritrade. “Traditional employees are generally enrolled in company-sponsored retirement programs with regular and automatic contributions, making it easier to pursue retirement investment or savings over time.”

Those who are self-employed can face a unique set of financial struggles as they work to get their businesses up, running and profitable. The TD Ameritrade survey further revealed that 61 percent of entrepreneurs reported unpredictable income as their biggest challenge to saving regularly. In fact, the majority (83%) of self-employed individuals who are currently saving for retirement reported that they have had to cut back or pause their retirement plan at one time or another.

“There’s nothing that says if you’re self-employed you have to take a traditional approach to investing or saving for retirement,” Demmissie notes. “Entrepreneurs may need to be more aggressive when it comes to retirement planning. That means contributing when they can, even if it’s not on a regular basis.”

Retirement tools The good news is there are several retirement vehicles that can help the self-employed address the savings challenges that come with working for themselves. If you’re self-employed and wondering what you can do to save, here are four retirement saving options you may want to consider:

1. Simplified Employee Pension (SEP) IRA

A SEP IRA is a retirement plan for self-employed business owners or corporations with few employees. SEP IRAs are funded by employers (employee contributions aren’t allowed, though business owners can fund an account for themselves), and one key benefit is that they’re easy to establish and administer. Other features include:

• No employer tax filing
• No specific annual funding requirements
• Flexible contributions

2. Individual 401(k)

This option is suitable for self-employed individuals or business owners with no employees other than a spouse or child. It allows business owners to make both employer and employee contributions, maximizing personal retirement contributions and business deductions. You might consider it if your business has irregular profit patterns. Some benefits are:

• Higher contribution limits
• Greater control over withdrawal timing
• Low administrative expenses

3. Savings Incentive Match Plan for Employees (SIMPLE) IRA

This IRA offers employees a salary-deferral contribution feature and a matching employer contribution. You might consider this if your business has steady income and your employees want to make retirement contributions. Features include:

• No employer tax filings
• Does not limit eligibility or employee access to funds
• Simple administration and low administrative costs

4. Profit-Sharing Plan

This is for a business owner who has variable profits, but wants to reward employees through a percentage of the companys profits. It offers the employer flexibility in determining annual contribution amounts or skipping years, if necessary. Other features include:

• Flexible, tax-deferred investment choices
• Tax-deductible employer contributions
• Simplified recordkeeping

No matter how you choose to retirement planning, the important thing is to make a plan and stick with it. When you do, you can enjoy the benefits of working for yourself and know that you are implementing your own agenda when it comes time to retire.

Looking for additional resources on retirement plans for the self-employed? The IRS’s Publication 560 and CNN Money’s “Ultimate Guide to Retirement ” have additional information about these and other retirement savings options.

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