Discover the tips and strategies that will help you achieve your retirement goals.

I'm your host, James Canole, and this is the podcast dedicated to helping you retire well.

It all starts right here on Ready for Retirement. for retirement.

Hi, everyone and welcome back to another episode of Ready for Retirement. I'm your host James Cannell. And today's episode is going to be about retirement plan options for people

who are self-employed. So obviously, this show is all about retirement. And how do you save

for retirement? And typically, for people that have an employer or an employee somewhere, it involves to some

extent saving to a 401k or saving to something that your employer offers. So what we're going to talk

about today is how do you do that same thing if you're self-employed? How do you make sure that you're on

track for retirement when you don't necessarily have an employer that's providing a retirement plan for you to save two. So let's jump right in because the first option,

when you're looking to see how do I save for retirement, the first option is going to be the same,

whether you have an employer or whether you're self-employed, and it's just your traditional IRA

and your Roth IRA. If you're looking to put money away for retirement, it doesn't matter if you have

an employer or if you're self-employed. As long as you have earned income, you can always make a

contribution to either a traditional IRA and or a Roth IRA. The way that that works is each year,

you can put up to $6,000 per year, at least for 2020, if you're under the age of 50 into those accounts.

And if you're 50 or older, again, in 2020, you can put up to $7,000 per year into one of those accounts. So the advantage

is if you put money into a traditional IRA, that's going to reduce your taxable income dollar for

dollar. So if you make $100,000 in a year and you contribute $6,000 to a traditional IRA, you're only

taxed on $94,000. So it can be a nice tax benefit today. Now, then that money grows completely

tax-free or tax-deferred for as long as it's in the IRA. And when you do pay taxes on it is when

that money comes out in retirement. So say you put $6,000 into an IRA, that money grows, and over time it grows to say $20,000.

Now you're ready to retire, and so you start to take some of that money out.

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