Pension Planning for the Self-Employed: Where to Start and What to Watch

Being self-employed has its moments. You’re in charge. You choose the work. You call the shots. But there’s one thing that gets pushed aside more often than not — your pension.

You don’t get nudged into a company scheme. Nobody tops it up for you. Especially early on, it can feel unclear or even a bit much.

Putting it off, though? That can cost you more than you think.

Let’s keep it simple. No financial jargon. Just a clear path to get started.

It’s On You

No way around this part. You don’t have an employer handling your retirement savings, so it’s up to you. That means you choose how much to put aside, when to start, and how to grow it.

And look, the state pension in Ireland helps, but it’s not enough to carry you through retirement by itself. Think bills. Think inflation. Think wanting to enjoy the years ahead, not just scrape by.

Your Options

In Ireland for example, if you’re a sole trader or freelancer, one of the first things to look at is a Personal Retirement Savings Account (PRSA). It’s flexible. No pressure to pay in every month if cash flow gets tight. You can stop and start again when needed.

If you run your business through a limited company, there’s also the option of an executive pension. This allows the company to contribute on your behalf, which can come with its own tax advantages. Some find this route more efficient, depending on income.

If you’re not entirely sure which one fits, that’s no problem. A pension advisor who works with self-employed people can walk you through it. Sorting the details early can save a lot of bother later.

What About Tax?

One of the biggest reasons to start a pension is the tax relief. In Ireland, you can claim back income tax on your contributions, up to a certain percentage based on your age.

That means you could be putting money toward your future while reducing your current tax bill. It’s one of those rare win-win situations. Yet lots of people miss out simply because they never take the time to look into it.

Watch Out for These

• Waiting too long

This one’s easy to fall into. You tell yourself you’ll start next year. But then next year becomes the year after that. The earlier you begin, the less you need to save each month to reach a decent pot.

•  Relying too heavily on your business or property

Some self-employed people assume they’ll sell the business or cash in on property down the line. That might happen. Then again, it might not. A pension gives you more control and doesn’t depend on timing the market right.

• Forgetting inflation

Retirement might span a few decades. If savings don’t grow over time, they lose ground. It helps to plan with growth in mind, not just caution.

• Thinking it has to be perfect

You don’t need to know every fund or strategy from day one. Start simple. You can tweak it over time. Doing something beats doing nothing every time.

• Failing to check in

Your income might change. So might your goals. Make sure to review your pension from time to time. A quick update now and then can make a big difference in the long run.

Don’t Overthink It, Just Begin

Sorting your pension as a self-employed person might not be the most thrilling task. But it’s one of the most important. You’ve built your own business, managed your own time, handled your own income. This is just the next thing to take charge of.

Try to keep at it whenever life allows. Looking back, there’s a fair chance you’ll be glad you didn’t drift away from it.