There are many advantages to working for yourself. However, being self-employed can also be a real challenge in a variety of aspects. Therefore, be sure to consider the following points prior to taking that leap of faith and giving up your 9 to 5 job to be your own boss.
If you do decide to be self-employed, you will be responsible for paying your own portion of Medicare and social security taxes in addition to federal and state income taxes. When calculating how much you will need to earn in order to live the type of lifestyle you are comfortable with, don’t forget about the taxes you will be responsible for.
Health and Life Insurance
When you have an employer, you will often times reap the benefits of employer sponsored health insurance. In some cases, an employer may provide company sponsored life insurance as well. Determine how much you will have to pay out-of-pocket for your own insurance and add that to your expense list.
In addition to offering insurance, many employers also provide a retirement plan to their employees that may include a match. Fortunately, if you do choose to work for yourself, there are a number of retirement plans such as the Roth IRA and Solo 401K that you can contribute to.
Current Financial Situation
Prior to quitting your job and starting your own business, you need to thoroughly evaluate your current financial situation. Are you swamped in student loan, credit card, or any other type of debt? Do you have a hefty savings fund? If you have a limited amount of savings and are currently in debt, it’s probably a good idea to hold off on self-employment until you have the cushion that’s necessary for working for yourself.
Setting a Work Schedule
One of the reasons becoming your own boss is so appealing is because you’ll have the freedom and flexibility to work whenever you’d like. Although this is great, it also requires self-discipline and responsibility. In order to increase your chances of success, you will need to set a work schedule and stick to it.
Protect Your Estate with Life Insurance from Simplified Life
It can be overwhelming and a bit frightening to go from a predictable salary to a variable one. By considering the points mentioned above, you will feel more comfortable with the idea of working for yourself. Keep in mind that you can always start your business on the side and slowly ease your way into self-employment once you’re in the position to do so.
Regardless of whether you decide self-employment is right for you, investing in a life insurance policy is a must to protect your family’s financial future. To secure a policy in the most simple way possible, fill out our Simplified Life’s online application form or call one of our friendly agents at 1-866-REAL-SIMPLE.