Retirement Saving Tips for Self-Employed Canadians

There are many ways of describing a self-employed individual, including gig worker, freelancer, and contract worker; even if you are working for an employer but own an income-generating side hustle, you still fall within the “self-employed” category.

If you are self-employed in Canada, or are thinking of becoming self-employed, saving for retirement is a do-it-yourself job—here are some retirement saving tips that your future will thank you for.

Pay Yourself First

“Pay yourself first” is one of the primary principles of personal finance—meaning, you should pay your own savings and investment accounts first before reinvesting into your business. It’s nice to look after your clients and offer additional products and services for free, but you have to prioritize paying your future self who will thank you for it.

Ensure You are Paying Yourself Enough and Raise Rates when Appropriate

If you are self-employed, your income typically depends on your hourly or project rates—ensure those rates mean you are paying yourself enough. Just because you are self-employed doesn’t mean you have to settle for a rate that barely justifies your expertise and experience. There may be a point at which you need to raise your rates.

Whether you are a self-employed corporate lawyer, realtor, software developer, creative producer, or other, there is a reason you have chosen to be self-employed. Ultimately, your rates are determined by your expertise, experience, supply, and demand.

Make sure you are up-to-date with the latest market rates and test for higher rates at appropriate times. If you are fully booked and are turning away new clients, that may be a sign that you are in a position to charge more.

Decide How Much to Save

After you have set aside money for income taxes (you’ll be taxed on your gross income; here are up-to-date Canadian federal tax rates), CPP and EI (you’ll be responsible for both the employer and the employee portions), and the right insurance coverage (like health, life, long-term disability and ADD insurance, which are usually provided by an employer), you’ll need to decide how much to save.

As a general rule of thumb, you’ll need about 25 times your anticipated annual income to retire on. Note, this is a very simplistic equation and varies by individual lifestyle desires at retirement.

Invest for Your Retirement

25 times your anticipated annual income may sound daunting, and that’s why you should consider investing to let your savings snowball through the power of compounding, which is a lot faster than if you leave it in a savings account. For most, investing within a tax-advantaged investment account like an RRSP or TFSA is the way to go.

Last and Most Important Saving Tip For The Self-Employed

As a self-employed individual, your income can be unpredictable and it may be easy to overlook regular contributions for retirement savings—which is why it is smart to prioritize your retirement funds by allocating some to your RRSP or TFSA first, ideally automatically from your personal bank account so that you do not forget. This requires financial discipline but will help you save time as you juggle the various tasks involved in your daily operations—and ultimately ensure you meet your savings goals.

Preserve and Build Your Wealth with Bloom

As automated forms of investment management services become more widely available, personal investment management may be done autonomously through an online investment platform. Though this may be quick and easy, there may come a time when you would like a more personalized approach by working with a professional investment manager who can help you preserve and grow the wealth that you’ve worked so hard to accumulate.

At Bloom Investment Counsel, Inc., your financial situation is private, personal and unique—and so is your investment portfolio. Visit Bloom’s website to learn more about how we help our clients preserve and grow wealth.


Bloom Investment Counsel, Inc. is a well-established Toronto-based independent, privately-owned boutique investment management firm providing customized, actively managed, Canadian and U.S. dividend-paying portfolios for wealthy individuals, family offices, foundations, corporations, institutions and trusts.

Founded in 1985, Bloom has experience in managing in excess of $2.5B in assets over the years. We believe that generating independent cash flow is central to the success of our clients’ portfolios because it provides capital for the present day, if needed, while continuing to preserve and build wealth for the future.

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This content is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this content should consult with his or her financial partner or advisor.

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