Does Main Street Need a Wall Street Strategy?

Self-Employed Workers Face Unique Retirement Challenges

Today, self-employed Americans and their employees make up nearly 30% of the U.S. workforce.¹

Even in strong economic times, saving for retirement proves difficult for this group. Before the pandemic, only 13% of solo business owners contributed to a workplace retirement plan. In contrast, 72% of employees at large companies participated in employer-sponsored plans.²

Many entrepreneurs fall behind on long-term savings. For guidance on building a retirement strategy tailored to self-employed individuals, see our Financial Advice for Retirement Planning for Florida Retirees.

As a result, many entrepreneurs fall behind on long-term savings.

Wall Street Rallies While Main Street Watches

Recently, the Dow Jones Industrial Average crossed 30,000 for the first time. At the same time, the S&P 500 gained more than 10% through November.³,⁴

However, many self-employed workers only read about these gains instead of benefiting from them. Instead, they focus on immediate expenses and unpredictable revenue.

Cash Flow Comes First—But Planning Still Matters

Although retirement plans offer many flexible options, ongoing uncertainty pushes business owners to build larger cash reserves. Consequently, they prepare for possible shutdowns or operating limits.⁵

Balancing short-term survival with long-term goals remains essential. Explore practical strategies in our Retirement Planning for Long-Term Care guide to see how long-term planning can coexist with immediate cash needs.

Take Control of Your Financial Future

If you run a business and feel overwhelmed by cash flow decisions, you’re not alone. However, you don’t have to face these challenges by yourself.

Please give us a call. Together, we can explore ways to prioritize both today’s needs and tomorrow’s dreams—so you can move forward with confidence.

Frequently Asked Questions:

Why is retirement planning difficult for self-employed workers?

Many self-employed Americans face irregular income, high operating expenses, and limited access to employer-sponsored retirement plans. These factors make it harder to contribute consistently to long-term savings.

What percentage of self-employed workers contribute to retirement plans?

Before the pandemic, only about 13% of solo business owners contributed to a workplace retirement plan, compared to 72% of employees at large companies.

Can self-employed workers access retirement plans?

Yes. Options include SEP IRAs, Solo 401(k)s, SIMPLE IRAs, and traditional IRAs. These plans offer flexible contribution limits tailored to self-employed income.

How does cash flow affect retirement planning for entrepreneurs?

Entrepreneurs must balance short-term operating expenses with long-term retirement goals. Building cash reserves ensures survival during slow periods while still allowing contributions to retirement accounts.

What is the difference between Main Street and Wall Street gains?

Wall Street gains, like stock market rallies, benefit investors with existing portfolios. Many self-employed workers focus on daily business needs and may not capture these investment gains unless they plan strategically.

How can self-employed workers prioritize both cash flow and retirement?

• Set aside a percentage of income for retirement regularly

• Use flexible retirement accounts like Solo 401(k) or SEP IRA

• Maintain an emergency cash reserve for unexpected expenses

• Review financial goals periodically and adjust contributions

Are there tax advantages for self-employed retirement contributions?

Yes. Contributions to SEP IRAs and Solo 401(k)s are generally tax-deductible, reducing taxable income while saving for retirement.

How often should self-employed workers review their retirement plan?

At least annually, or when business income changes significantly. Regular reviews ensure contributions align with both cash flow needs and long-term financial goals.

Can financial advisors help self-employed workers plan for retirement?

Absolutely. Advisors can help:

• Identify the best retirement plan for your income

• Balance cash flow and retirement contributions

• Create a long-term strategy to achieve financial goals

^{2. CNBC.com, September 12, 2019}

^{3. The Wall Street Journal, November 25, 2020}

^{4. Yahoo Finance, November 30, 2020}

^{5. CNBC.com, September 4, 2020}

Important Disclosure and Investment Risk Information

^{This article is for informational purposes only and is not a replacement for real-life advice, so make sure to consult your tax, legal, and accounting professionals before modifying your retirement strategy.}

^{The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. The S&P 500 Composite Index is an unmanaged group of securities considered to be representative of the stock market in general. Index performance is not indicative of the past performance of a particular investment. Past performance does not guarantee future results. Individuals cannot invest directly in an index.}

^{Investing involves risks, and investment decisions should be based on your own goals, time horizon and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.}

^{The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.}