Freelancers must build retirement portfolios without employer matches or automatic enrollment. Learn the simplest effective portfolio structure and how to contribute on variable income.
Employees build retirement through automatic payroll deductions and employer matching. Freelancers must be entirely deliberate about both the contribution and the investment decision.
For most freelancers, a simple two or three-fund portfolio is sufficient:
Option 1 (Simplest): One global equity fund
- VWRA (Vanguard FTSE All-World Accumulating) — holds 3,700+ stocks from 47 countries in one fund
- Expense ratio: 0.22%
- Nothing else needed
Option 2 (Three-fund): US stocks + International + Bonds
- VTI or VOO: Total US market or S&P 500
- VXUS: International excluding US
- BND: US total bond market
- Allocation example at 35: 70% VTI, 20% VXUS, 10% BND
As you age, gradually shift from stocks to bonds. A common rule: hold your age as a percentage in bonds (30 years old = 30% bonds). More aggressive: 110 minus your age in stocks. The right allocation depends on your risk tolerance and years to retirement.
For near-retirement freelancers: The order of investment returns matters. A market crash in year 1 of retirement is far more damaging than the same crash in year 10, because you are selling shares at low prices.
Protection: Keep 2-3 years of expenses in cash or short-term bonds in retirement. Draw from these during market downturns rather than selling stocks at depressed prices.
Always maximize Solo 401(k) before investing in taxable accounts. The tax deferral on $66,000/year is worth thousands annually.
Free to start. No bank connection needed. 150+ currencies, tax estimates for 20 countries.
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