How to Create a Benefits Package as a Freelancer

As a freelancer, you don’t get paid vacation or employer-subsidized health care. Here’s how to create a benefits package as a freelancer.

One of the most challenging aspects of being self-employed is replacing the benefits package you might have had when working in corporate America. In fact, before making the switch to freelancing full-time, it’s vital that you take a step back and make sure you have your benefits covered.

I love the freelance lifestyle, and I love what I do. However, it’s been a bit of a challenge over the years to create a benefits package that works for me. Here’s what I’ve learned about putting together benefits that work.

Start with Your Budget

As always, you need to figure out where you stand with regard to your budget. I, personally, don’t use a budget. However, I do have a spending plan. And that’s where I start. It’s always about beginning with your priorities and going from there.

Whether you use a budget or a spending plan or call it something else, figure out which items are most important to cover right now. You can grow your benefits package as your business grows. To begin, though, it makes sense to be sure that you have health insurance and that you are saving for retirement (yes it’s possible). Health insurance and retirement are the cornerstones of most benefits packages, so it makes sense to start with these items.

Find Health Insurance as a Freelancer

I had a good experience with my state’s health care exchange. I was able to find an affordable and serviceable plan with a respected insurer. I chose a high-deductible plan because I like taking advantage of the Health Savings Account (HSA). If you have a family or make a large number of medical visits each year, this might not make sense for you. Run the numbers to see if a high-deductible plan, combined with an HSA, might work.

Even if you don’t use the HSA, there are ways to get affordable health care. If you have a partner, find out if it is possible to obtain coverage under their insurance. Some companies don’t offer partner plans, so you might still need to find your own. If you have children, though, it can make sense to keep them on a partner’s insurance. My son is on my ex-husband’s employer plan, so I don’t need to worry about his insurance.

Start looking for insurance at, or you can compare costs with organizations like Freelancers Union. There are increasing numbers of organizations that can help freelancers band together to get group rates on health insurance.

When you create a benefits package as a freelancer, this should be your first step. While health insurance can feel expensive, it’s even more expensive to be without it. Before you quit your day job to be a full-time freelancer, line up the health insurance.

Retirement Planning as a Freelancer

Because there are a number of challenges related to retirement planning when you’re a freelancer, many freelancers overlook retirement savings. Don’t be one of them. Start putting away money for the future as soon as you can. The important thing is to build a habit of saving, even if you aren’t setting aside a huge amount. There are plenty of resources that allow you to set aside small amounts of money each month for retirement. I opened a Roth IRA several years ago to get started.

There are other choices, too. You can set money aside using, SIMPLE or SEP IRAs, or by putting money in an Individual 401(k). Review your choices and figure out what plan works best for you. I recently — finally — opened a SEP IRA and began making contributions. With a SEP, I can make bigger annual contributions than I could with a traditional or Roth IRA. Plus, I make too much these days to contribute to a Roth.

If you’re looking for ideas on beginning investing, including investing for retirement, you can check out my guide on how to start investing.

You might be surprised at how fast your nest egg can grow as you set money aside. Even if all you do is automatically transfer $25 to $50 a week to your tax-advantaged retirement account, you’re building a good habit that will help you in the future. As you make more money, you boost your contributions and get more out of your compounding returns.

I’ve used Betterment for my Roth IRA in the past, although I’ve moved my money elsewhere. Even though I needed to move my money, I still like Betterment and think it’s a solid choice.

Other Benefits for Your Package

As you create a benefits package as a freelancer, don’t forget to build in other perks. The freelance lifestyle is about flexibility, and I use that in my planning.

Vacation days

I like to take time off, creating “vacation” days. However, as a freelancer, that takes a little extra effort. To have a true vacation that doesn’t involve work, I usually have to plan ahead, turning work in early.

A good example is when I went on a Christmas cruise and New Year trip last year. I reduced my December workload and then front-loaded everything so that I was done by the 21st of December. Then, I didn’t have to worry about client work from December 22 until January 3.

It doesn’t usually work like that, though. A lot of the time, I expect to do some client work, even when I’m away. However, I might reduce the workload or batch some of it. The last time I went to New York City, I spent the first day just working from my Airbnb, but then I had the next two days to enjoy guilt-free. Then I worked a couple of hours the days until it was time to leave.

Figure out an approach that works for you. At some point, you do need to create some space for a break and a real vacation. It’s the hardest part of putting together my freelance benefits package.


If you have children, you might need some help taking care of them. This can include daycare, nannies, or some combination. While it seems tempting to say that you work from home now and shouldn’t need to pay for childcare, the reality is that you really do need some uninterrupted work time. Many parents are finding it difficult to manage childcare, school, and work during the COVID-19 pandemic, and if you work from home as a freelancer, this is an issue even in the best of times.

I sent my son to daycare and preschool a couple of times a week when he was much younger to ensure that I could focus on needed work things. If you can afford it, factor the cost of childcare into your freelance budget. Unfortunately, childcare costs much more these days. You might be able to get some help from a babysitter or a mother’s helper. Some parents make use of co-ops and care-swapping arrangements as well.

Life and disability insurance

Other important considerations are life insurance and disability insurance.

Life insurance is essential and will give you peace of mind knowing that you have provided for the financial security of your loved ones if you can’t be there for them. It’s possible to get affordable life insurance by shopping around or using fintech companies like Bestow to get a quote — without needing a medical exam.

Disability insurance protects your income when you cannot work because of a covered disability. As a freelancer, it can be a little difficult to get disability insurance, but it’s not impossible. It can be well worth it to have it in place if you end up in a position that keeps you from working. I have a disability policy through my bank, with a small premium and enough to cover some long-term stuff if it happens.

Healthy lifestyle benefits

In the past, I’ve worked for companies that offered stipends for gym memberships or healthy meal-planning services. As a freelancer, you’re on the hook for all those costs. I’ve paid for a gym membership in the past, but today I work out at home.

The hardest part is carving out the time to exercise. I’ve started blocking it out in my schedule to make it a priority. Set aside the money and time to manage your health, and you’ll be a better freelancer and business owner.

Bottom Line

Putting together the right benefits package as a freelancer can be challenging, but it is possible. Take a look at your needs and your budget, and do your best to develop a plan that allows you to achieve success.

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