7 Retirement Planning Investment Strategies for Freelancers

  • Author: Melby Anna Stephen
  • 5 min read
  • December 29, 2021
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7 Retirement Planning Investment Strategies for Freelancers

Freelancing has the potential to be extremely rewarding, but you should also plan your retirement planning investments property. Here is some money advice to make sure you’re on the proper route to financial independence.

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Many office workers have resigned from their normal jobs and started freelancing because they want to make a profession out of their passions. While freelancing may be extremely rewarding, it can also be risky, especially in the early stages when assignments are few.

It may also be difficult to meet your financial obligations without a consistent source of income, especially if your income is projected to be lower than your last-drawn wage. Savings and investments, understandably, take a back seat during this period as day-to-day expenses take precedence. Even when your finances stabilize, de-prioritizing savings and investments become a habit as you focus more on operating expenditures. This might leave you exposed to life’s whims, over-reliant on unneeded loans, and unable to fulfill your financial objectives on time.

Also Read: Retirement Planning Investment Strategies With Real Estate In India

7 tips for freelancers to achieve financial freedom

If you’re a freelancer, our advice may come in handy.

  • Aim to save at least 10% of your income

Freelancers frequently do not have a steady source of income. They make a lot of money in some months and very little in others. As a result, compared to salaried and professional workers, careful financial planning becomes even more crucial for them. As a result, freelancers should set aside at least 10% of their earnings to invest. One may invest much more depending on their financial objectives. It’s important, though, to make this a habit. Regular and wise investments will not only strengthen their financial foundation, but the power of compounding will also help them build their fortune.

  • Include Real estate in your investment portfolio

For millennia, real estate has always been marked by an increase in the property’s value. With more and more multinational corporations investing in India, real estate values have risen at a quicker rate than ever before. It is all the more attractive for real estate investors in India in the post-Covid-19 climate, with international investors eager to relocate their investment from China to India. As people migrate to new cities, there will be more employment, more inflow, and more individuals eager to buy properties. As a result of increased demand, real estate prices will rise.

Even if you invest in a home that appears to be of lower value on the outskirts or in the suburbs, it might turn into a gold mine in the future due to rising property values! Whether it’s real estate for novices or real estate for entrepreneurs, you’ll discover acceptable solutions.

  • Include mutual funds in your investment portfolio

Fund managers are in charge of identifying and selecting the greatest investment assets accessible in the market. These assets might be stocks or bonds. Freelancers frequently lack the time and skills needed to choose the best investments. As a result, having mutual fund assets in their investment portfolio is preferable. Please keep in mind, however, that each mutual fund plan has its unique set of risks and rewards. As a result, it’s critical to choose the right type of fund that aligns with their financial goals (such as raising funds for a home down payment or building an adequate retirement corpus) while taking into account factors such as risk factors, return expectations, tax and inflation impact on returns, liquidity requirement, and so on. They can also consider FDs or RDs, PPFs, ELSS, and other investment vehicles. If a freelancer becomes stuck at any stage, they should seek the advice of a competent financial counselor.

Also Read: The Ultimate Guide To Retirement Planning Investment In India 2022 & Beyond

  • Use SIP (Session Initiation Protocol)

Even though freelancers do not have a steady source of income, they can join a Systematic Investment Plan (SIP) in mutual funds with a little amount to profit from the rupee cost average and reduce risk. To save time as a freelancer, you can set up an auto-debit feature straight through your bank account.

  • Open a high-interest savings account or one that allows you to sweep money in

Many banks provide savings accounts in which, if the balance exceeds a certain threshold, the money is automatically converted to a fixed deposit, which pays greater interest. As a result, freelancers should choose a bank that provides the sweep-in service. Another alternative is to put the money in a high-interest savings account, which certain institutions provide. It gives you the freedom to withdraw cash whenever you choose without jeopardizing the interest rate on your remaining amount.

  • Make sure you have enough insurance

Everyone needs insurance, not just to safeguard their finances but also to save money on taxes. Companies typically provide group insurance for their employees, which freelancers do not have access to. As a result, freelancers should consider purchasing a comprehensive health insurance plan that provides a substantial sum assured for themselves and their families to protect their funds in the event of a medical emergency. In addition, they should consider purchasing term insurance (with an amount assured of at least 10 times their yearly income) to safeguard their family’s financial interests in the event of their death.

  • Demand a contract

Clients not paying on time or withdrawing a project in the middle of a project are common barriers for freelancers. However, some of these concerns might be alleviated by signing a contract before starting employment. In opposed to ad-hoc work, a contract gives more security and assurance of employment and income. Before you begin freelancing employment, insist on a formal contract. You may find it difficult to secure contract employment at first, but as you acquire experience, things will fall into place.

Also Read: Retirement Planning: Traditional real estate method vs. Cryptocurrency?

  • Register to work as a freelancer

Registering with various agencies, organizations, and government bodies will not only help you land more projects but will also increase your credibility. You may also register for GST and obtain a Micro, Small, and Medium Enterprises (MSME) certificate, based on your eligibility and income.

Also Read: What Is Pre-retirement Planning In India?

Freelancing is a significant step toward achieving professional independence. And these money suggestions will guarantee that you are on the correct course to financial independence as well. Finance is an area of life were making rash judgments may cost you a lot of money. Financial planning is crucial, and all of these suggestions must be followed when doing so. Because you don’t have an institute to fall back on, being self-employed and a freelancer comes with additional duties. You may continue to be your boss without fear if you have a solid financial plan in place. Assetmonk maybe you’re the best option if you’re seeking a real estate partner to start your investing with. Assetmonk has been providing some of the safest and greatest solutions in India to its clientele. Get in touch with our staff to get started on your investments right away.

Retirement Planning Investment Strategies for Freelancers FAQ’S:

How do freelancers plan for retirement?

Term insurance plans, insurance that doubles the price, traditional life insurance with cash at regular intervals, unit-linked insurance plans, saving com life insurance plans, monthly or one-time investment plans, and so on are some of the acceptable investment plans for freelancers.

Which IRA is best for freelancers?

Start with a Roth IRA if your freelancing income is currently minimal and you expect it to increase over time. Choose a conventional IRA if your freelancing income is large. (Also, a Roth IRA has income restrictions; people who earn too much are ineligible to contribute.) Another reason to start with a Roth is to avoid penalties.)

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