Independent contractors have been advised to take greater responsibility for their retirement plans by making regular contributions, even when their employment is temporary or seasonal.
Certified financial planner Douglas Boneparth gave the advice while responding to a question from a contractual worker employed by the Maryland state government during its 90-day legislative sessions.
The worker wanted to know whether enrolling in the state’s 401(k) retirement scheme was worthwhile, particularly because their employment records are reportedly cleared at the end of each session, requiring them to register again the following year.
Responding, Boneparth explained that contributions made to a 401(k) account remain the worker’s property even after the employment contract expires. He stressed that the account does not disappear when the employer removes the worker’s details from its records.
However, the individual would not be able to make additional contributions until returning to work and becoming eligible again during the next legislative session.
The financial expert maintained that participating in the scheme was still a sensible decision, noting that even contributions made over a relatively short period could benefit from tax-deferred investment growth.
He added that workers should pay particular attention to employer matching contributions, where available, because they provide additional retirement funds that would otherwise be difficult to obtain.
Boneparth also recommended setting calendar reminders ahead of each legislative session to ensure that workers complete their re-enrolment and resume contributions without unnecessary delays.
According to him, contributors can either leave their accumulated savings in the existing 401(k) account after their employment ends or transfer the funds into an Individual Retirement Account (IRA), which may offer greater investment flexibility.
Meanwhile, the financial expert highlighted an upcoming federal retirement incentive known as the Saver’s Match, scheduled to begin in 2027.
Under the programme, eligible individuals earning below $35,500 annually, or $71,000 for married couples, could receive up to $1,000 in matching contributions, with the amount rising to $2,000 for qualifying married couples.The benefit will be claimed through 2027 federal tax returns filed in 2028.
He also pointed to the federal government’s proposed $1,000 contribution to eligible Trump Accounts for children born between January 1, 2025, and December 31, 2028, with additional contributions potentially available through participating employers and other organisations.
