Don’t Miss the Boat! Even Entrepreneurs Need to Save For Retirement

In March 2005, I was 38 years old and really beginning to find my footing as a self-employed copywriter. My wife and I were in front of our accountant at the time, Tom. We always believed that for business, an accountant was money well spent. And this day it proved to be much more than that, even for my little one-man writing business.

I was a bit surprised, because until that time, the thought of anything even remotely close to retirement savings never crossed my mind. I was always a job hopper/serial entrepreneur and was never at a company long enough to build anything of note in a 401k. And at 38, I was simply happy making decent money on my own. Retirement? Yea, whatever…

But Tom explained two things to me that day. The first was that I needed the tax deduction that came with a traditional IRA (and yes, I did). But he also made me realize something. He asked me to think about how fast the 20 years between 18 and 38 flew by. And I had to admit, those 20 years did go fast. And he replied “well, the next twenty go even faster.”

So now I’m 58, and I’ve got AI knocking on my door. But having that IRA puts me in a much better position than if I didn’t have it. Thank you, Tom. Your words that day made a difference in my life.

As grateful as I am now, I’ll never forget that it almost didn’t happen. And in talking to many small business owners, this very type of thing is shockingly common. Especially for micro-businesses and solopreneurs: That one-person/small partnership company such as construction, landscaping, housecleaning, pet care, hairdressing, etc. 

In fact, I just had a guy over to replace my porch steps. He’s a self-employed handyman, and he’s 40. Since I was kicking this article around in my head, I asked him about retirement, and he laughed and said he’s going to work until he dies. In short, he’s not saving anything. He told me he can’t afford to. The day-to-day operation of the business and swings in how busy he is makes saving untenable.

My handyman is not much different from many small business owners. While data on this is hard to come by, a Pew Charitable Trusts analysis that is frequently cited stated that approximately 30 percent of self-employed people have no retirement savings. And I feel the number is likely much higher the smaller the companies get.  

This is a trap that many business owners and solopreneurs fall into – business is good enough to provide a living, but there never seems to be enough to put away for later. Add to this the young person’s thought process – even at 38, I couldn’t fathom “retirement age” until my accountant put it into perspective.

When I told my accountant we really couldn’t afford to put a few thousand into an IRA, he gave us a few words of wisdom that made sense. The first was to look at what the tax savings were going to be. That made it easier to swallow in a net-dollars-in-and-out sense. And the rest… well, we were contributing to a savings account. He advised me to start putting a portion into an IRA instead. “You’re really just putting it into a different account”, he said, which made a lot of sense to me. It still does. My wife already had a retirement plan at her job, but we began to make my retirement savings a priority. And once it became an expected yearly thing, it became surprisingly easy to budget for.

Now I’ll give you some of my own advice: if you own a business, retirement savings should be a part of your plan. If you can’t swing it, then I’d argue your business is kind of failing. I know that may sound harsh, but you need to think about – and budget for – retirement as soon as you can. Don’t fall into that trap where you’re making a living but little else. Sitting here typing this in 2025, I cannot think of much that would frighten me more than not having retirement savings at my age. And, sadly, as entrepreneurs, there’s no retirement plan unless we do it ourselves. So do it.

My last piece of advice? Hire an accountant. A real live business accountant. Not your friend who’s “good with numbers,” not your uncle Max who “knows this stuff.” A real accountant who knows tax law, who’s up on the changes, and one who could give you some sage advice, like Tom did for me 20 years ago.