Many Self-Employed Americans Aren't Saving Enough for Retirement: Transamerica

The number of self-employed people who plan to continue working in their retirement years was surprising, Collinson said. But she told ThinkAdvisor: "If anything, the self-employed may have a false sense of security. Given that they're self-employed and they're successful in what they do, they may be overly optimistic about how long they will be able to continue working or that their business will be viable, and retirement could very well come sooner than planned or expected."

Many of them are failing to make the necessary preparations for their retirements, she noted. Although most of the self-employed are saving for retirement to some degree, all too many of them are either not saving enough or not saving at all. While 55% of them are consistently saving for retirement, 30% are only saving from time to time and a "concerning" 15% say they never save for retirement, the firm said in an announcement about the study.

Of the self-employed, 16% indicated they had either taken a loan or early withdrawal from a retirement account, Collinson also told us. Of those who said they weren't saving for retirement, 20% indicated they had done that, she said.

Total household retirement savings among the self-employed is $71,000 (estimated median), TCRS said. But relatively few are saving in tax-advantaged retirement accounts, suggesting they may be missing out on an opportunity, it noted, adding only 31% are saving in a traditional or Roth IRA. The self-employed, meanwhile, expect diverse sources of income when they retire. Seventy percent expect income from Social Security and 54% from other savings and investments. But only 40% expect retirement income from typical retirement accounts including 401(k)s, 403(b)s or IRAs.

The analysis contained in the study on the self-employed was broken out from the company's 19^th Annual Transamerica Retirement Study, which was prepared internally by the research team at Transamerica and based on a 25-minute, online survey conducted between Oct. 26 and Dec. 11, 2018, among a nationally representative sample of 5,923 adult workers by The Harris Poll on behalf of TCRS. Of those workers, 755 people who identified themselves as self-employed were broken out for the separate study, TCRS said.

It was the first time that TCRS did a separate study on the self-employed, Collinson told ThinkAdvisor, noting her company was responding to the surging number of Americans who have become self-employed.

— Related on ThinkAdvisor:

• We Graded the 12 'Smartest' Cities for Retirement
• 11 Best States for Jobs
• 12 Best States for Military Retirees: 2019