Retirement,health insurance and other topics

[Mrearn]

I currently work a state job 40 hours a week but truly miss working on IM. Living in the US its very hard to be Self employed without being taxed highly, second, pay high premiums and co pays for medical services and three worrying about getting older and having long term care covered.

I was curious if anyone else was thinking about this and feel free to comment.

 

[azgold]

Hi, @Mrearn . I'm in a different country, so this probably won't help you, just gives a different perspective.

pay high premiums and co pays for medical services

I live in Canada, so on top of some of the rules being different, I'm lucky enough to have free health care.

being taxed highly

Do you pay higher tax than you do on your regular personal income in the U.S.? At the moment, my self-employment earnings are lumped in with my yearly earnings. It's legal to do that here, up to a certain dollar value.

getting older and having long term care covered.

This is definitely a concern for me. I'll be covered for basics but they're....pretty basic. As in, you don't want to have to live that way unless you have no other choice.

I have grown kids who would take me into their home(s) but I don't want to do that to them. So, I continue to save.

An additional concern to the ones you mention: after death plans. I have insurance for that but thought I'd bring it up for anyone who hasn't thought of it.

 

[Mrearn]

Hi, @Mrearn . I'm in a different country, so this probably won't help you, just gives a different perspective.



I live in Canada, so on top of some of the rules being different, I'm lucky enough to have free health care.

Here we rely on the employer or buying it at 700 to $1000 a month depending upon the plan.



Do you pay higher tax than you do on your regular personal income in the U.S.? At the moment, my self-employment earnings are lumped in with my yearly earnings. It's legal to do that here, up to a certain dollar value.

We pay a Self Employment tax 35% on top of your regular income (regular job or part time job if you have one)


This is definitely a concern for me. I'll be covered for basics but they're....pretty basic. As in, you don't want to have to live that way unless you have no other choice.

I have grown kids who would take me into their home(s) but I don't want to do that to them. So, I continue to save.

I guess buying life insurance policy would be helpful for those here in the US but again family is another great option as well.

An additional concern to the ones you mention: after death plans. I have insurance for that but thought I'd bring it up for anyone who hasn't thought of it.

Again I think your right it comes down to savings, insurance and planning out what you think you might need. I have stock so I try to use that as a back up along with IM earnings and possible other ventures that I will just keep as savings. I think this is a good conversation to have as most don't want to bring it up.

 

[TrafficBroker]

Ohhh...common life problems.

 

[azgold]

Ohhh...common life problems.

Yup. However, in this biz, you have no employer making contributions or submitting taxes and building up a pension fund. We need to make sure that we look ahead to cover old age care, potential disability and funeral costs.

Scary thoughts but if you wait until you need those things, it will be too late to do anything about them.

 

[JH1nz]

I'm a U.S. resident as well and I agree with these issues. As far as health insurance, OP is correct it can be expensive. Life insurance however, I believe is quite affordable. I checked out MetLife a while back and they have plans for as low as like $10/month. But I've decided recently to keep working full time so I can reap the benefits, and do IM on the side to supplement my income. Im single and am quite comfortable with my dual income. Since i don't mind my full time job, it's a win win for me.

 

[azgold]

i don't mind my full time job

Nice, you're one of the lucky ones!

 

[Dr. Forum]

I am in a different country and therefore not in a position to state in details what you guys are going through. I have however heard the rumours that you people are heavily taxed and the must have insurance cover makes life just difficult. I do feel that when you are employed there all these things will be much easier to handle. But paying tax I believe is our obligation as citizens and therefore we can not do away with it.

 

[azgold]

@Dr. Forum , I can't speak for anyone else but here in Ontario, Canada, we are highly taxed.

They said that if source deductions (tax, employment insurance, Canada pension) were gathered in one go from our paycheques instead of a bit per cheque, the government would get all of our paycheques until July of each year. Think the rate when I heard that was 52% or something like that. I have no idea what it is now, that was prior to 2008.

A few years ago, the government started charging a fee on our income tax return for healthcare, too. However, it's small ($300, I think) and geared to income. It's just something that was new to us in this country when it suddenly appeared. But as long as you have a valid health card, most basic care and testing is free.

People grumble about paying their taxes but we get a lot for it and have a pretty good quality of life here.

Thing is, as self-employed people, we must remember to set up self submission of taxes and pension, if we don't want to get into trouble and get a big bill, too.

How are taxes and benefits in your country @Dr. Forum ?

 

[Ben Welch-Bolen]

I currently work a state job 40 hours a week but truly miss working on IM. Living in the US its very hard to be Self employed without being taxed highly, second, pay high premiums and co pays for medical services and three worrying about getting older and having long term care covered.

I was curious if anyone else was thinking about this and feel free to comment.

I wouldn't say that is true, being self employed gives you more control over where you pay taxes. For example, you can make your salary smaller and take the rest through a LLC / S corp drop down which wouldn't be liable to certain types of taxes others pay.
-> tried to post a link but couldn't since I am new.

I would really recommend looking at ADP or Trinet, these are PEOs that co-employ you and have access to great health care. Sure it will be expensive, but that is the story of all health care in the USA. Let me know if you need review on either as I've used both of those and looked at a lot of other PEOs too. You can also go high deductible and use a HSA to build a nest egg to use for health care emergencies tax free.

Long term care insurance is pretty cheap if you start young.

Self employed gives you access to SEP 401k/IRAs too which means you can put a TON of money away tax free.

Thanks, Ben

 

[davidpaul]

yes, you can take long term insurance
Insurance Market research reports|