Hey there, Solopreneurs~

How’s it going, everyone? Welcome to K.I.S.S., the newsletter built by business owners for business owners.

(And, of course - Aspiring business owners are especially welcome!)

This newsletter aims to break down high-level business concepts into easily understandable chunks of knowledge. No more Reddit/Youtube holes!

Let’s Talk “Benefits”

When you’re self-employed, it’s not too difficult to build up a salary that rivals full-time jobs. However, they have something that we don’t—benefits.

Today, I’ll be breaking down how I handle three of the most important benefits that often get neglected by gurus who preach about the amazing, wondrous world of business.

It might not be glamorous, but damn it, it’s practical.

How Does One Retire?

First and foremost, let me say this: I am not a certified financial anything. This isn’t advice, but rather a description of what works for me.

Conventional jobs often have 401(k) plans, and good ones have a 401(k) contribution match. The best part of those is that, more often than not, your employer does all the actual legwork for you. You just sort of select a plan, and the money automatically comes out of your checks.

For us self-employed folk, things look a bit different. Here are two of our most popular options:

Individual Retirement Accounts (IRAs):

There are two types of IRAs: Traditional and Roth.

Personally, I have a Roth IRA that I pay a set amount into each month.

The cool thing about Roth IRAs, in particular, is that the money you take out of the account is 100% tax-free upon retirement. What you see is quite literally what you get.

Traditional IRAs, on the other hand, are a little different. Contributions are tax-deductible, and the money grows tax-deferred, but you pay taxes on withdrawals in retirement.

Annual contribution limit: $7,000 (or $8,000 if you’re 50+), for 2024.

Solo 401(k):

Also known as an Individual 401(k) or Self-Employed 401(k).

This is a great option for sole proprietors or small business owners without employees, though I personally don’t have one.

These allow for higher contribution limits than IRAs. You can contribute both as the employer and the employee:

• Employee contribution: Up to $22,500 (or $30,000 if you’re 50+).

• Employer contribution: Up to 25% of your net earnings from self-employment.

• Annual contribution limit (both employee and employer): Cannot exceed $66,000 for 2024.

Everyone’s Nightmare: Healthcare Benefits

I’m going to be candid with you: I’m in a healthcare position that is extra simple and extra precarious at the same time.

I have Crohn’s Disease, which is a chronic illness that classifies me, in the eyes of the government anyway, as disabled. This means that I qualify for something called MAWD, or “Medical Assistance for Workers with Disabilities.”

I think this program is just in my home state of Pennsylvania, but your state might have something similar. I suggest looking into it if you’re chronically ill and self-employed!

(For the sake of transparency, I pay $77 per month for a plan that covers my basic care and illness-specific treatments.)

Unfortunately, I’ve heard that for many, health insurance is the most expensive bill they have as a self-employed person.

So, if you’re in a corporate job right now and are looking to make the leap into business, I highly recommend looking into your healthcare situation before making any rash choices.

No-Mo-PTO :(

When you’re self-employed, there’s no built-in PTO bank or HR department reminding you to take time away.

If you’re not working, you’re not earning—so the idea of taking a vacation can feel like an impossible luxury.

So, what do you do when that inevitable live event pops up? Here are my suggestions:

Plan For It Like A Business Expense

Just like you’d set aside money for taxes or supplies, start building a “time-off fund.” Calculate how much time you’d like to take off in a year, then break that down into manageable amounts to set aside monthly.

This way, when it’s time to step away, you’re not stressing over lost income.

Automate, Delegate, Outsource

If you can, try to systemize the parts of your business that can keep running without you. This could mean automating certain tasks, outsourcing to other freelancers, or bringing in a trusted contractor to handle day-to-day operations in your absence.

Be Very Intentional About Your Time Off

When you do take time off, treat it like a non-negotiable appointment. Let your clients know well in advance, set boundaries around communication, and stick to them.

This might mean unplugging from your emails or turning off notifications, but trust me, it’s vital for your mental health.

That’s All, Folks 👋

That’s all for this week’s edition - I hope you enjoyed reading it as much as I enjoyed writing it.

Even though these aspects of self-employment can be daunting, they aren’t impossible to deal with. They just require a little bit of extra intention and research.

If you have any further questions about today’s topic, or any general insights/inquiries, don’t be afraid to shoot me a message on LinkedIn or simply reply to this email!

Until next time - Remember to keep things simple!