Working as an independent consultant and being your own boss offer a number of benefits including setting your own hours, determining your specialties, and choosing your clients. However, independent consulting is not without its challenges.
In MBO’s 2016 State of Independence report, we surveyed independent consultants to learn about their experiences, goals, and difficulties. Here, we discuss two of the most frequently reported challenges and the steps you can take to overcome them.
One common concern for independent consultants is the uncertainty and challenge of planning for retirement. No matter how much an IC may love what they do, few wish to work full-time forever. In the corporate world, employees can often rely on employers to provide 401(k) plans and investment opportunities that help build retirement savings. Without these benefits, independent consultants are solely responsible for ensuring that they will be financially prepared for retirement.
Solution: Though retirement planning may seem daunting, there are a number of possibilities available to independent consultants. The best solution for you depends on many factors, including your goals and income, which you can discuss with a financial planner. A few options include:
One of the many benefits of working as an independent consultant is the opportunity of unlimited income. On the other hand, running your own business also means losing the comfort of a guaranteed salary. In our State of Independence survey, 52% of men and 42% of women feel they earn more money working on their own, but finding that balance can be difficult.
Solution: Though income uncertainty is simply part of self-employment, there are steps you can take to prepare and protect yourself against financially lean times.
Defined Benefit Plan for self-employed professionals: everything you need to know about Defined Benefit Plan contribution limits, advantages, and disadvantages.
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