Here's How a New Law Can Help Freelancers Save for Retirement

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A woman wearing headphone and sitting at a desk in her apartment having a video call with coworkers.

More and more people are self-employed or freelancing these days, which brings many advantages in terms of flexibility and independence. But there are downsides as well. For example, it can be hard to put money aside for your old age. A recent Pew Charitable Trusts survey of nontraditional workers showed that around half of them weren’t confident they’d have a comfortable retirement. 

That’s partly because the onus is on you, rather than an employer, to organize a retirement plan. Plus, freelancers’ income streams aren’t always regular so it can be hard to juggle your contributions. If those scenarios ring any bells for you, it’s worth knowing you could access federal help, both now and in the future. 

New law helps everybody build retirement savings, including freelancers

The Secure 2.0 Act was signed into law at the end of last year. It’s a broad retirement package that will impact almost every American. The idea is to encourage people to save more for their old age. One aspect of the new law, called the Saver’s Match, could make a big difference to freelancer workers.

The match replaces the current Saver’s Credit and won’t come into effect until 2027. But when it does, the government will make a 50% match on up to $2,000 of the money you contribute to your retirement account. That means lower-income freelancers could get a boost of up to $1,000 toward their retirement each year. 

The match starts to phase out once you reach a certain income level. For example, joint filers who earn $41,000 or less can receive the full match while those who earn up to $71,000 will only get some money. Here are the phased income brackets for the Saver’s Match:

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

The government will match contributions made to individual retirement accounts (IRAs) and ABLE accounts. If you aren’t freelancing, the Saver’s Match also applies to employer retirement plans. It’s important to note that the money will be deposited directly into your retirement account, it won’t take the form of a tax credit. 


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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 as retirement savings often fall into the “important, but not urgent” category. Unfortunately, whether it’s figuring out your health insurance to planning your retirement, your employer won’t do it for you. 

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

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

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

It’s also worth looking to see whether the current Saver’s Credit — which the new Saver’s Match will replace — can help you now. It’s a non-refundable tax credit, so it can reduce the tax you pay down to zero but won’t give you a rebate. Depending on your earnings, you may qualify for a tax credit of 50%, 20%, or 10% on the first $2,000 you put toward your retirement. 

Bottom line

If you’re not as on top of your retirement savings as you’d like, you’re not alone, especially if you’re a freelancer. Find out what tax advantages there are to saving for your old age, and which route might benefit you the most. If you can qualify for the Saver’s Credit or the Saver’s Match, so much the better.


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