"A gray head is a crown of glory; It is found in the way of righteousness." — Proverbs 16:31

When you work for a large company, saving for retirement is often as easy as enrolling in your company’s 401k program or working for the company long enough to qualify for a pension. Some companies even match the contributions you make to your retirement account. When you’re self-employed, planning and saving for a Christian retirement requires a little more effort.

Types of savings plans plan for the self-employed

There are several types of saving plans available to those who own their own businesses or work as freelance writers, designers, artists or consultants. Below are just a few to consider:

1. SEP IRA — A Simplified Employee Pension (SEP) IRA is an easy way for any self-employed person to save, no matter what their income. This type of account can be opened at most any bank or financial institution and there are few, if any, fees associated with these account. You are allowed to contribute up to 25% of your earnings, up to a cap that increases annually. (The 2013 limit is $51,000.) Your contributions are tax-sheltered until you withdraw the money at retirement.

2. Solo 401k. A solo (or traditional) 401k allows you to contribute both as an employee and as a boss. The maximums are currently $5,500 as an employee ($6,500 if you are over age 50) and 25 percent of your income as a boss. Both amounts are discretionary, so you can contribute a lot in a good year to help reduce your tax liability and scale down your contribution in a lean year. As with the SEP IRA, your contributions are not subject to income tax until you withdraw the money.

3. Simple IRA. A Savings Incentive Match Plan for Employees (SIMPLE) IRA is a good choice for a self-employed person who plans on hiring employees at some time in the future. With a Simple IRA, you can continue to contribute to the same plan even after your company grows. The current maximum contribution to a Simple IRA is $11,500 ($14,000 if you are over 50), but you’re required to match 3% of your employees’ contributions. Like the SEP IRA, your contributions are tax-sheltered until retirement. However, this plan has a hefty penalty (25% compared to the SEP’s 10%) if you have to withdraw your funds before retirement.

If you’re self-employed and having trouble finding extra money each month to set aside towards planning for a Christian retirement, perhaps we can help. Faithworks Financial is a Christian debt relief company. If credit card bills and other installment payments are keeping you from creating a secure future for you and your family, a debt management plan can help you pay off those debts so you can start paying yourself and saving for your retirement. Call us at 877-232-5109 to discuss your options with one of our caring Christian debt counselors.