How can skilled tradespeople plan for retirement and savings?

The construction industry is among the worst in the U.S. regarding employment-based retirement plans, with only agriculture ranking below it. According to a 2015 Labor Department survey, about a third of construction workers were eligible to participate in retirement plans through their employment and only one quarter actually participated.

A major factor at play in this industry is that construction workers are more likely to be independent self-employed contractors than workers in other industries, making them less likely to have retirement plans or savings. Although the explosion of the gig economy over the past few years has raised the profile of this and other issues facing self-employed workers, planning for retirement remains particularly important for many in production occupations, since working past retirement age is less of an option in an industry that tends to be more physically challenging.

So, how can skilled tradespeople plan for retirement and savings?

A good place to begin is to focus on learning about retirement planning and start plotting a path forward – the sooner, the better. There is excellent information about personal finances and retirement planning all over the web, through online courses, and in career coaching books. With the trend moving away from the use of defined benefit plans, which guarantee a certain level of income at retirement, toward 401(k) plans over the past few decades, those working in the construction industry must take responsibility for retirement savings plans.

If you wish to secure regular work with an employer, the good news is that the industry-wide workforce shortage is forcing construction companies to offer better benefit packages to attract qualified workers. Tradespeople with specialized skills are in an excellent position to negotiate more favorable retirement benefits – especially when they have armed themselves with skills they can leverage.

Those who prefer a more independent route of freelance contracting or consulting need to prioritize retirement planning, since you are solely responsible for your future. Options available for independent tradespeople include defined benefit plans, such as a Simplified Employee Pension (SEP) and other plans that designate future benefits based on a predetermined formula, and defined contribution retirement plans such as 401(k), savings and thrift, stock ownership, and profit-sharing plans that specify an annual contribution amount.

Contractors who belong to a trade union can join multi employer plans, which are collectively bargained plans where workers pay into a fund managed jointly by union and employer trustees, with the guidance of investment advisers. Non unionized contractors may have the option to the advantage of financial services offered by professional trade associations that cater to the needs of their members.

Beyond financial planning, skilled tradespeople should consider career self-management as a parallel path toward retirement security that allows you to direct your livelihood through an uncertain employment landscape.

The main idea behind career self-management is for workers to maintain their own employ-ability by building a career brand that helps employers better recognize expertise and capabilities, whether the desire is to climb the corporate ladder or navigate the gig economy. It involves a commitment to ongoing training and being proactive about self-improvement, with a focus on increasing human capital by developing transferable skills. Workers should nurture both hard skills, which are tangible and specific to each industry, along with soft skills such as critical thinking, interpersonal communications, and developing a strong work ethic. This personal and professional development is tied to a branding aspect that involves self-marketing and knowing how to document and communicate new skills to current or prospective employers.

Through self-education, planning, and taking action to develop savings as well as managing your own career path, you can take control of your future and arrive at retirement with the resources you need to enjoy life to the fullest extent possible. 


Josh Munns
Joshua Munns grew up in the construction industry differently than most, his Mom, Mary Davis, started a window company as a single mom when he was just 4 years old in 1983. Having a mom who was starting a business in the construction industry at only 23 years old made for some very interesting days. Fast forward 24 years to 2007 I took over the family business just in time for the Recession which hit my business extremely hard. I spent the next 11 years rebuilding the business, rebuilding my workforce and completely reshaping the company. In 2018 I sold the business to focus my energy on my passion, building careers in construction. In 2018 I founded Ground Up Careers to help business owners and employees build careers together. The career does not exist with the employer and the employer does not exist without the career. When employees and employers work together the end result is amazing. By building a strong company culture, offering great benefits and career paths for my employees I was able to build the business back stronger than ever. I did it and I want to help other owners take that step to take their business to the next level. It is an amazing feeling and a great privilege to be able to provide people with great careers.

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