what we have for insurance + retirement being self-employed
Being self-employed has SO many perks, but also a lot more loops to jump through! My husband and I are both self-employed so we’ve had to work through it all - including going through the process of buying a house being self-employed. Wooof!
It can be overwhelming. I’ve definitely been there.
Disability insurance, liability insurance, equipment insurance, Roth IRAs, SEP plans, all of things once made my head spin at night so I’m here to help if you’re in the same boat!
Here’s the low down on what we have for insurance and how we save for retirement.
Business Insurance
We have this through State Farm, where we have all of our other insurances through! It ranges from $25-40 typically. When I lived in Minnesota it was $40. In Wisconsin, it’s $27. So, it ranges! This covers $2 million in liability if something were to happen at a wedding, for example, and equipment in case I drop my camera, or my house floods!
You can also get it through PPA (Professional Photographer’s Association).
long-term disability insurance
I have this incase I get injured or get sick and can’t work anymore. I have a fam I have to take care of! We got this through our financial advisor at Northwestern Mutual. It’s not a ton of money each month for peace of mind in case something happens to you!
life insurance
We got this through our financial advisor at Northwestern Mutual as well! Pretty self explanatory. ;) Ask your advisor what amount would be right for you and your family.
Health Insurance
People usually gasp at the fact we’re both self-employed at and quickly ask, “What do you do for health insurance?!”
We use a cost sharing health program called MediShare. In short, members of Medishare each contribute money each month. MediShare then disburses that money to the people who need it for their medical expenses that month. Cost sharing programs are becoming a huge thing since health insurance has become so expensive! But many of them are based on Christian values, so I would read into it to see if it’s right for you.
We’ve used it since April 2016 and have loved it. Although it’s not technically “insurance”, the government accepts this form of alternative insurance and doesn’t penalize you for not having insurance at the end of the year.
This blog post goes more in-depth about what cost sharing is.
Other options:
If you’re looking to buy through the marketplace, I would highly recommend asking for one of their guides to help you find the best plan for you!
Get a part-time job somewhere that offers benefits, like Trader Joes (only have to work 15 hours) or Whole Foods (I believe you have to work 20 hours)!
Try to luck out and get a spouse with benefits. ;)
What we personally have set up for retirement:
Retirement
Once again, we work with a financial advisor who walked us through all of this. I would highly recommend reaching out to someone at a company like Northwestern Mutual if you need more clarity!
Roth IRA -
Roth IRAs are tax free when you take them out which is amazing! Since I’m paying the tax now instead of later, I can’t deduct this amount paid every year. You are also limited to only saving up to $6000 per year (used to be $5500 but changed as of Jan 2019!). If you’re married, you can contribute up to $12000.
If you ever want to draw from this account before you’re 59 1/2 (not recommended, but it is flexible!), you can take out anything you have contributed minus any growth the account has had.
SEP Plan -
You can contribute 25% of your business income (net profit, which is after expenses) each year, which is huge! You can write off all of this on your taxes because you’re going to pay the tax when you take it out, just like a 401k. If you have employees or eventually do you’re required fund theirs as well.
We opened a Sep Plan this year to give us more flexibility on what we could contribute and for write-off purposes.
If you’re looking for more insight on all of this, I highly recommend:
Meeting with a financial advisor at a company like Northwestern Mutual! Email me if you’d like recommendations.
Listening to this Oprah’s Supersoul Conversation podcast episode, Women and Money with Suze Orman.
I also bought her book, Women and Money!
