Financial Planning for Self Employed Contractors
What You Need to Know About Financial Planning
There’s a lot to be said for running your own business. You can make a lot of money being a self-employed contractor, but you don’t have the option of being able to assume you’ll always have job security.
Things also get more complicated regarding financial planning as a self-employed contractor. When putting together a financial plan, you need to think about all the following:
- Cash flow management
- Tax planning
- Risk management
- Retirement and succession planning
- Estate planning
Are you feeling a bit overwhelmed? Don’t panic! We can help get you organized and determine the best way to ensure your financial planning is simplified and optimized.
Cash Flow Management
Cash flow management is a must for a self-employed contractor. Having a solid handle on your cash flow can also help you determine the best ways to expand your business, ensure you always have enough cash and help you work towards your long-term goals.
Tax planning can get confusing and complicated for a self-employed contractor. For example, you may have to pay your taxes quarterly and estimate how much revenue you’ll bring in next year.
To avoid issues with the CRA, you should work with a tax professional. A tax professional can suggest tax-optimized ways to pay yourself, ensure you’re aware of all the tax deductions you can claim, and file and pay your taxes on time.
As someone who is self-employed, you need to ensure you have proper insurance coverage. After all, no one will pay you if you get sick or become disabled and can’t work!
The best way to provide financial protection is with the right insurance. We can explain how different insurance options, such as life insurance, critical illness insurance, and disability insurance, can provide you with a financial safety cushion.
Retirement And Succession Planning
Not sure what to do regarding retirement planning as a self-employed contractor? You have many tax-efficient retirement savings options, including contributing to RRSPs and TFSAs or creating an Individual Pension Plan (IPP).
You also need to create a succession plan to indicate what you want to happen in your business if you retire, become ill, or die suddenly. Life insurance is one good option for funding a succession plan.
Estate planning must protect the future of your business and your family. Good estate planning can help avoid unnecessary taxes and ensure that your assets are passed to loved ones as you choose.
Let Us Help You Organize Your Finances
No matter what aspect of financial planning you need help with, we’re here for you! So reach out to us today to get started!