In this guide: Your Own Safety Net: Health Insurance and Retirement Plans for Freelancers. You’ll get practical steps you can apply this week.
As a freelancer, you must be your own HR department. That means arranging your own benefits - notably health insurance and retirement savings. Here’s how to build your safety net:
- Health Insurance Options. Since you don’t have an employer plan, explore individual market choices. In the U.S., you can enroll in an ACA Marketplace plan each year during Open Enrollment (Nov-Dec for next-year coverage). Depending on your income, you may qualify for subsidies to reduce premiums. Alternatively, look into private plans or membership-based programs (like health co-ops for the self-employed). If applicable, consider special situations:
- COBRA: Temporarily keep coverage from a previous employer (though this can be expensive).
- Spouse’s Plan: If you’re married, joining a spouse’s employer plan may be an option.
- Trade Associations: Some freelance guilds or associations offer group insurance rates (e.g. the Freelancers Union).
- Retirement Plans for Self-Employed: Unlike W-2 workers, freelancers don’t get company 401(k) matches, so you must proactively save. Three common plans:
- SEP IRA: You can contribute up to 25% of your net earnings (max ~$66,000 for 2024). No annual filing for small accounts. Good for high earners.
- Solo 401(k): If you have no employees (other than a spouse), you can contribute as both employee and employer. For 2024, you can save up to $66,000 plus catch-up if 50+ (employee deferral up to $22,500 + employer portion). Allows Roth option.
- SIMPLE IRA: Easier to set up but lower limits (up to $16,000 total contributions for 2024). Best if you have one part-time employee.
- Roth and Traditional IRA: In addition to above, you can still fund an IRA (limit $6,500 for 2024) if you meet income rules. Roth IRAs grow tax-free, which can be very beneficial if you expect higher future earnings.
- Save Regularly: Treat retirement contributions like a business expense. Even in lean times, try to contribute something. Automate it by scheduling transfers each month. Over years, compound interest builds up.
- Understand Social Security: In the U.S., freelancers pay full Social Security tax through the selfemployment tax. That eventually counts toward your Social Security retirement benefits. However, Social Security usually covers only a portion of a retiree’s needs, so having personal savings is crucial.
- Financial Planning: Sadly, only about 22% of self-employed workers have a formal written retirement plan. Don’t be that statistic! Even a simple plan (“I will retire by age 65 with $X saved”) can motivate you to save consistently. Consider meeting with a financial planner or using online retirement calculators to set clear goals. By proactively securing these benefits, you avoid gaps in coverage and build long-term security. Health emergencies or an early retirement can be devastating without planning. Setting aside even 5-10% of your income for retirement and budgeting for monthly insurance premiums will pay off in peace of mind. Key takeaways: Compare healthcare plans during open enrollment to find affordable coverage. For retirement, open a SEP IRA or solo 401(k) and save aggressively - remember, no boss match means every dollar you save is on you. With intentional planning, you can replicate (and even exceed) the benefits that employees often take for granted Secure your future: research available health plans and retirement accounts today. Check out our guide to freelancer retirement plans and start building a safety net that keeps you covered - healthwise and finance-wise. Wrap-up: Pick one step from this article and implement it today. Small systems compound fast in freelancing.
Next steps
Pick one tactic from this article and apply it in the next 30 minutes. Small, consistent improvements compound fast in freelancing. If you want a quick win, update one thing in your portfolio, then send one high quality outreach message to a well matched lead.