Here’s how the new law can help freelancers save for retirement

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This law could help you save money for your future.

Key points

  • The Security Act 2.0 aims to help everyone save more for their retirement.
  • One provision, called the Savior’s Match, could be of particular use to freelancers.
  • Find out which tax-advantaged account would best suit your needs, regardless of your work situation.

Today, more and more people are self-employed or freelance, which brings many advantages in terms of flexibility and independence. But there are also disadvantages. For example, it can be difficult to save money for old age. A recent survey of non-traditional workers by the Pew Charitable Trusts found that about half of them were not confident of a comfortable retirement.

This is partly because the onus is on you, not your employer, to organize your retirement plan. Plus, freelancer income streams aren’t always regular so it can be difficult to juggle your contributions. If these scenarios ring a bell, it’s worth knowing that you can access federal aid, both now and in the future.

The new law helps everyone save for retirement, including freelancers

The Secure 2.0 Act was signed at the end of last year. It’s a broad retirement package that will affect nearly every American. The idea is to encourage people to save more for their old age. One aspect of the new law, called Savings Matching, could make a big difference to freelancers.

The match replaces the current saver’s credit and won’t take effect until 2027. But when it does, the government will give a 50% match on up to $2,000 of money you contribute to your retirement account. This means lower-income freelancers can get a boost of up to $1,000 towards their pension each year.

The match starts winding down when you reach a certain level of income. For example, joint filers who earn $41,000 or less can get the full match while those who earn up to $71,000 will only get some money. Here are the tiered income groups for Match Savers:

  • Between $20,500 and $35,500 for single and married taxpayers filing separately
  • Between $30,750 and $53,250 for a head of household
  • Between $41,000 and $71,000 for the joints

The government will match contributions to Individual Retirement Accounts (IRAs) and ABLE accounts. If you’re not a freelancer, Saver’s Match also applies to employer retirement plans. It is important to note that the money will be deposited directly into your retirement account, it will not take the form of a tax credit.

Start planning for retirement today

You don’t have to wait until 2027 to start building your retirement savings. The temptation to put it off is understandable, especially since saving for retirement often falls into the “important but not urgent” category. Unfortunately, whether it’s figuring out your health insurance to plan for your retirement, your employer won’t do it for you.

Plus, the earlier you start saving for retirement, the better. The power of compound interest means that even five or 10 years can make a big difference to your nest egg. While you probably have many other demands on your finances and bank balance, your future self will thank you.

If you don’t know where to start, a good place to start is to figure out what type of retirement account might suit your needs. There are a number of options, including IRAs, Roth IRAs, Solo 401(k), SEP IRAs, and SIMPLE IRAs. These are all tax-advantaged accounts, which give you tax breaks in different ways. Check out our guide to free retirement accounts for more information on each of them.

Once you know what type of account you’ll be using, look at your budget and see how much you can realistically contribute. It’s okay if you decide to start small and work your way up. The most important thing is to start somewhere. If you are able to automate your contributions, all the better. That means you’re less likely to put it off or forget it.

It’s also worth looking at whether your current saver’s loan — which will replace the new savings match — can help you now. It’s a non-refundable tax credit, so it can reduce the tax you pay to zero, but it won’t give you a rebate. Depending on your earnings, you may qualify for a 50%, 20% or 10% tax credit on the first $2,000 you invest for retirement.


If you’re not as close to your retirement savings as you’d like, you’re not alone, especially if you’re a freelancer. Find out what tax breaks there are in saving for your old age and which route could benefit you the most. If you can qualify for a saver’s loan or a saver’s match, all the better.

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