Self-employed need better retirement strategy

Many self-employed are not taking adequate steps to prepare for their future retirement, according to an Aegon study.

The Aegon Center for Longevity and Retirement and the Transamerica Center for Retirement Studies report found that although many self-employed planned to fully retire at an older age and had a flexible vision of their own retirement and a transition, they were not undertaking the steps to plan accordingly.

The study, which surveyed self-employed people in 15 countries in Europe, Australia, the Americas and Asia, also found that only 60 per cent of those who were self-employed had a retirement strategy, while only 13 per cent had it written down.

Furthermore, 40 per cent planned to retire "after age 65 or older or never" and, at the same time, only 38 per cent had a backup plan in the event they needed to stop working before they planned.

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According to the study, 34 per cent of those who were self-employed said they were saving for retirement and another 26 per cent of the self-employed were confident that they would be able to retire in a lifestyle they considered comfortable.

According to an executive director of the Aegon Center for Longevity and Retirement and president of Transamerica Centre for Retirement Studies, Catherine Collinson, the self-employed faced a unique set of challenges including irregular income and a lack of access to employer-sponsored retirement benefits.

"For the self-employed, preparing for retirement requires a long-term do-it-yourself approach which many are not undertaking," Collinson said.

Aegon Centre for Longevity and Retirement's manager, Mike Mansfield, added: "The self-employed offer an exciting vision of a flexible retirement which can bring continued income and enjoyment, a vision which should be an inspiration for all".

"However, this vision can only be achieved with adequate planning and preparation," he said.