You don’t have to make contributions to your superannuation when you’re self-employed. But if you don’t have a sensible super strategy, you’re probably not going to love retirement.

Firstly, congratulations. Taking control of your life by working for yourself is commendable. I salute you, because I know it’s not the easiest of paths to take. The struggle can be very real sometimes. But you know deep down that the juice is, or will be, worth the squeeze.

When you work for yourself and you’re generating your own income, the beginning can be tough. Income can be uncertain and erratic, especially at the start of any new business. And if you’re in the start-up phase, you’re probably not thinking about your retirement yet.

Factor a super strategy into your business plans

But having a super strategy is worth thinking about now. Even though as a self-employed person you’re not required to contribute into superannuation, it makes sense to. Otherwise, down the track you might not have enough to retire on. Which I’m guessing is a very different vision to what you had in mind for your “golden years”.

As a business owner, your business is your retirement nest egg, plus anything you already have in super. But relying on the growth of your business to retire in the sun is a risky business itself.

It’s useful to diversify your investments, so you have a couple of money pots growing an abundant retirement. Sound good right? But what does a good super strategy for self-employed earners look like?

Here are two super strategies worth investigating to see if they’re right for you.

1. Super savings

Firstly, it’s smart to save into super.

Making small, frequent contributions into your super account will make a big difference when you retire.

Start with a small amount each month that you can comfortably live without. Then increase it each year as your business grows. It sounds boring, but superannuation is an excellent forced savings plan, with better-than-the-bank returns and tax benefits, too.

2. Super investment

Another retirement fund strategy option actually sits outside of your super account. It’s trickling money into an investment portfolio that is invested by your company and gives you compound growth on your return each year. There are many platforms, companies and options, to take into consideration your actual circumstances.

A popular platform in Australia is Raiz. Raiz is an investment company that offers a couple of options, including an app that automatically invests your spare change from your every-day purchases.

For example, if you buy a latte for $3.50, then platforms like Raiz automatically round this up to $4.00, using the extra 50 cents to invest into an online investment portfolio.

You can also contribute your own money to get kick-started to invest more, but do your own research. There are admin fees to consider and terms and conditions are subject to change. Generally speaking, the fees for this type of service shouldn’t cost more than 1 per cent of your balance.

Whatever your super strategy, just get one

These are just two of the available investment options both inside and outside of your superannuation. There are plenty more strategies available to help you build your nest egg and get growth out of your cash.

It’s important to know what’s available and make a start to building your retirement fund one way or the other. After all, you want to retire with a cocktail in hand on that dream cruise you always wanted, not worrying about every dollar.

This is an edited version of an article that was originally published on Wealthy Self. It contains general information only. It should not be relied on as finance or tax advice. You should obtain specific, independent professional advice from Wealthy Self or another registered financial adviser in relation to your particular circumstances and issues.

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