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DIY Benefits: Freelancer Health Insurance & Retirement Savings

Oct 8, 2018
(updated: Feb 20, 2024)
Max 5 min read

The number of freelancers in the gig economy is on the rise, and showing no signs of stopping. In fact, projections show that by 2024, 46.6% of the U.S. workforce will be freelancers. With more and more people forgoing the traditional career path and jobs with typical benefits, it’s important for people going out on their own to find their own benefits.

One easy way for freelancers to still receive benefits is through their spouse or partner’s employer. But if that’s not an option, here are some tips and tricks for putting together your own “benefits package” as a freelancer.

Medical Insurance

When you leave your job, you have a certain amount of time before your old insurance expires. You’ll want to sign up for your own health insurance before then, because even if monthly premiums are higher than you’d like, having insurance will save you a ton of money in the case of a medical event down the line.

Thanks to the Affordable Care Act, many health insurance options may be discounted based on your income. You can shop for health insurance through your state’s online marketplace—get more information at The 2024 open enrollment period for health insurance takes place from November 1 - December 15 (and most other years will have a similar timetable). Make sure to sign up for a plan during this time to ensure that you’re covered at the start of the new year.

You may also be eligible for discounted insurance through a professional association, union, or through a chamber of commerce. Check out all your options before you commit to a plan. Some of the typical plans types include:

An HMO, which usually will limit your choice of doctors and specialists to those within their specific network. With this sort of plan, you’ll generally be assigned one primary care physician, who will then refer you to any other specialists you need.

A PPO plan offers a bit more flexibility—you can go to any healthcare professional you want to, without a referral—but if you choose to go outside your network, you’ll have higher out-of-pocket costs, and some services might not be covered by your insurance.

A high-deductible plan with an HSA savings account. The premiums with these plans are generally lower, but you’ll pay all of your medical expenses out of pocket until you meet your deductible. The benefit of this plan is that you can save money for your health costs in a tax-advantaged HSA account.

If you find health insurance plans confusing, consider using a “health care concierge” service like Joany. This service is free and will find you the best plan for you and walk you through the application process if you just answer a few questions about your needs.

Vision Insurance

Many of the same providers that offer health insurance will give you the choice to add vision onto your plan. If that’s not an option for you, try looking up plans from national providers like Humana or VSP. If you have a high-deductible plan with an HSA savings account, you could also opt to forgo vision insurance and pay for any vision related costs out-of-pocket from your tax-advantaged HSA account.

Dental Insurance

This seems like it would fit into medical insurance, right? Wrong! Make sure to also sign up for dental insurance. On average, this will cost significantly less than medical insurance, but each are important in their own right. Because the last thing you want as a freelancer is a tiny toothache costing you thousands of dollars.

There are three main options when you’re looking to buy dental insurance. If you buy your health insurance off the state or federal marketplace, you can also buy dental insurance there as well. This is only an option if you’re already purchasing a health insurance plan through the exchange. Your second option would be to get dental through a union like Freelancers Union. Another option is to purchase a plan directly through a private insurance company. Unlike health insurance, you can sign up for dental plans whenever you want—there is no enrollment period.

Retirement Savings

When you work for a company, you’ll usually contribute to a 401k plan (and sometimes the company will match up to a certain percentage). Sadly, freelancers no longer get the matching contribution of an employer, but you can still take advantage of retirement savings accounts with an IRA or Roth IRA, which offer similar tax advantages as a 401k. In 2024, IRA account holders can contribute up to $7,000 a year, and that amount increases to $8,000 for workers over age 50.

Another option for self-employed workers is a SEP IRA. Traditionally for self-employed people or small business owners, SEP IRA’s work similarly to IRA’s, but they allow workers to contribute much higher amounts. For the 2023 tax year, the maximum contribution for a SEP IRA is 25% of your total compensation or a maximum of $66,000.

There are many companies both online and offline where you can open your retirement account. You also may want to consider rolling your retirement savings from your previous employer into your new IRA to take advantage of compound interest, but first, speak with a financial professional to see what works best for your situation.

Emergency Savings

Freelancing can be very lucrative, but it’s also very uncertain—you can make a ton in one month, but struggle to make enough to pay the bills the next month. We suggest trying to save up a buffer to help you through the lean times before you start fully funding your retirement accounts. This way, if you fall on hard times, you’ll have money available to help you get through it (without having to pay a fee for early withdrawals from your retirement account).

Sick Days & Vacation Days

Having the potential of unlimited vacation days sounds pretty amazing, but if those days are unpaid, it can make taking any days off a double-edged sword. This is why some freelancers save up in advance to have money to “pay themselves” their day rate if they need to take sick days or want to take a vacation in the future. Even if you don’t have any vacations coming up, saving for a few unexpected sick days is a good policy to plan in advance for a rainy day.

Life Insurance & Disability

Some freelancers may consider supplementary insurance policies that would cover your expenses should something happen that would make you physically unable to work. And as with any situation, life insurance coverage is always an option, especially if you have a family and dependents. While these types of insurance are not mandated, some freelancers may opt to purchase a plan.

These are all good places to start when you’re creating your benefits package for yourself. It may seem like a lot of information, but if you take the time to figure out your insurance and retirement accounts when you first start freelancing, it will help you be successful down the road as you continue to build your freelance career.

*Editor’s Note: All advice in this post is from the author’s personal experience & online research. Please check with professional healthcare, financial, insurance & tax professionals before taking action based on this information.*

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