Three examples of retirement planning for the self-employed

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We’re familiar with the traditional career trajectory of an employee. Work diligently for your employer and save strategically with a retirement account, and ideally, you’ll retire by 65.

What’s more of an unknown is what retirement planning looks like when you’re self-employed. Do you save differently? Is the timeline the same? What are my retirement options?

The good news about the ambiguity is there’s a wide range of directions you can take to retire on your terms and you’re not limited to a retirement plan of an employer’s choosing.

It’s also a challenge as it’s unclear what the best options are, given your retirement planning is personal and depends on how much you’re making, when you want to retire fully or partially, and how much you’ll need to save to make your plan a reality.

Understanding the landscape of retirement options available to you is where you start, as you can structure your plan similar to a full-time employee or create a completely customized plan.

Working for yourself is a reality for more professionals as Americans filed 5.7 million new business applications in 2025, the most in two decades, and over half of Gen Z job seekers are pursuing contract work over traditional employment, according to a LinkedIn survey.

As a baseline (other options exist too), here’s a breakdown of how three self-employed professionals are approaching the timing of their retirement, the types of work they’re focused on to support their future, and the retirement accounts they’re contributing to.

An important note that this content is for informational purposes only and does not constitute financial, investment, tax, or legal advice. You should consult with a licensed financial advisor.

Retirement is the act of permanently leaving the workforce, no longer making money. But we don’t need to limit ourselves to that definition and can expand upon it aligned to your goals.

Instead of it being the final act of your professional life, you could aspire to retire in phases, earlier than usual, or later; it’s up to you. A phased approach is where you reduce how much you’re working in a certain time period. You’re still working, just less often, and the end goal is to get to the point later where you fully stop.

This is an important part of my retirement plan as I want more control over my time sooner and want to begin limiting how often I’m working and not wait until my 60’s to slow down with work.

My goal is to adjust my schedule and work four days a week by 40 years old, three days a week by 50 years old, and then I’ll basically feel retired, only working three days a week.

I’ll fully stop working once I have enough money saved, if there comes a time I’m no longer interested in the work, and when it’s necessary for my health or otherwise for me to fully stop. Time will tell.

I’m 38 now, so I have two more years until I move to a four-day-a-week schedule. Until then, I plan to save, pay off my mortgage, and design my calendar for a shorter work week. I’m married, so my lovely husband and I split the mortgage costs.

Taking back more of my time and living comfortably is how I see each stage of retirement. You determine the timing of your career wind-down and with it, how much you’ll need to save to make it a reality.

Another aspect to consider when mapping your retirement is the kind of work you’re doing now and what you’d like to work on in the future, or step away from.

“My retirement plan as a self-employed professional is really about retiring from this industry, specifically. I’m 33 now, and I’m working toward stepping away from social media by the time I turn 40,” says Jayde Powell, a freelance social media strategist and creatorpreneur who’s worked for herself since 2022.

“I’ve been in social media for almost 15 years, and while I love the brand and business I’ve built, I’m genuinely concerned about the long-term mental health effects of this kind of work. So for me, “retirement” isn’t the traditional idea of stopping work altogether—it’s about building a life and a business that are sustainable and don’t have to revolve around social media,” says Powell.

To accomplish this in the next seven years, she is working to become debt-free (paying off credit cards, mortgage, and student loans), investing more in a Roth IRA (working with a financial advisor), and creating revenue streams that don’t rely on her labor (work that doesn’t solely require active effort).

Part of developing a retirement plan is assessing what kinds of work you find enjoyable, lucrative, and sustainable, as well as which types of work are active versus passive income.

Certain types of work, whether that’s showing up on social media, delivering corporate training, or teaching at universities, might be the right fit in one era of your career and not in another.

“It wasn’t until I was about three years into my own business that I really started thinking about my end goal. A lot of that came from clarity I gained through entrepreneurship—I think being your own boss acts like a mirror. It gives you the chance to reflect on what kind of life you actually want to build, and once I started thinking about my future goals, it made sense to start planning early, even in those first few years of business,” says Powell.

You determine what work feels right for you and when you’ll shift your priorities (if at all) by experimenting with different types of engagements, adapting to what’s in demand and profitable, talking to other practitioners about their experiences with this type of work, and tracking your own engagement in the work over time, so you’re clear on what’s rewarding and the trade-offs.

“Your version of entrepreneurship doesn’t need to make sense to anyone but you. As you get clear on what matters most—whether that’s more time off, stepping away from a particular field by a certain age, switching careers, whatever it is—you have to start investing in that future now. I look at every choice I’m making as a professional today as a strategic step toward that eventual end goal, because I know I am the only one who can set myself up for success,” adds Powell.

As you make moves that’ll support you later, we can all benefit from shifting some of our income from active to passive sources of work that don’t require you to be the one delivering it.

The point is spending less of your time working by investing in offerings that scale your impact with recurring revenue and/or make money off of your money with compound interest.

Scaling your impact and earning passive income looks like offering a paid newsletter subscription, selling digital products, rental income, affiliate sales, equity deals, or earning royalties from a book. None of these are quick fixes or easy routes.

Dorie Clark, a bestselling author, communication coach, and keynote speaker, refers to this as “maximizing passive income” as it’s not an overnight tactic. As Clark describes it, she’s spent a disproportionate share of the past decade creating online courses and a community as recurring revenue streams.

The hope is you do most of the work upfront in a passive arrangement, requiring less of your time on a recurring basis to provide value. But you still need to refine as you go, as maintenance is always required and it can take months and years for an income source like this to pay off.

You have greater flexibility to diversify and explore different ways of earning when working for yourself, so get started on building out this infrastructure now for more options later.

As you’d guess, saving with a strategy is the cornerstone to retiring when and how you want. But you don’t have an employer providing out-of-the-box options; that’s where a financial advisor can help you choose a retirement account aligned to your small business.

“My plan is to sock away as much money as possible, as early as possible, so I can let compounding work in my favor. That means maxing out my retirement contribution every year and setting up a Defined Benefit Pension Plan and Profit Sharing Plan/401(k),” says Dorie Clark.

“I’ve been self-employed for 20 years - longer than I worked for other people. Those jobs didn’t offer retirement plans, so I put away money in Roth IRAs and always maxed out my contributions. Now I do the same thing at a higher level and with slightly more sophistication, including doing ‘backdoor’ Roth conversions and creating my own Defined Benefit Pension Plan (which is rather complex to set up and maintain, and you have to hire specialists, but it allows me to save exponentially more money than would otherwise be possible),” Clark explains.

On my end: I initially had a SEP-IRA as my retirement account for my single-member LLC. Once I switched my business over to an S corp, I rolled that over to a 401(k) that I contribute to today. I oscillate between monthly payments and making lump-sum contributions throughout the year.

My plan for the near future is for my husband and me to pay off our mortgage (it’s likely happening soon!!), then put our extra monthly income away in a Roth IRA as a starting point.

“What’s distinct about my approach [compared to full-time employment] is that my financial advisor has already had me roll over the 401(k) I built during my W-2 employment years into a Roth IRA, which allows that money to keep growing over time—without being tied to a single employer’s plan. I contribute about $1,000 each month, and as a result, I was even able to pay off one of my credit cards recently, which had always felt like an impossible task,” says Jayde Powell.

It’s important to note that each of us relied on financial advisors and/or accountants to choose the right retirement accounts, as they’re the true experts at these financial decisions.

“Part of being an entrepreneur is putting your ego aside and delegating—working with partners who are knowledgeable in the areas where you’re not,” shares Powell.

“Having a financial advisor has been huge for me—she’s shown me the range of ways I can actually invest my money. And I think that’s something more entrepreneurs need: at some point in your business, you stop focusing solely on increasing revenue and start thinking about how to make more money from the profit you already have,” she adds.

Whether you’re in the initial planning phase or revisiting your retirement plan, get started as soon as you can. Small steps is how you begin saving and future-proofing yourself.

You’re not alone in navigating this decision, but as your own boss, you’re responsible for leading the process and ensuring you remain on track towards your version of retirement.

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