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The Challenges of Being in the New Contract Workforce

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Re: The Challenges of Being in the New Contract Workforce

#201

Post by paulclinger »

acconrad wrote: post #76

Am I in the minority here for being a contract developer who is happy to be in this place? * I make over 40% more than I did when I was full-time, and I was already in the top band for pay in my title. This far exceeds the 15% markup for self-employment tax. * My wife works full time so she has our back for health insurance * I can save way more for retirement with an SEP IRA than I ever could with a company-sponsore…

> This far exceeds the 15% markup for self-employment tax.

It's not even 15% difference, as the salaried workers also pay half of it, so the difference is just the employer portion, which is paid by self-employed contractors.

I've been paying for my own insurance (a bronze plan) for the last three years, as it was cheaper than adding me to our family plan. It wasn't very expensive (started around $300/month in WA), but was going up about 20% each year, so this year we switched to a high deductible plan.

Re: The Challenges of Being in the New Contract Workforce

#202

Post by maxxxxx »

brudgers wrote: post #108

One aspect of the "gig economy" that I've not seen covered is the way it effects gigsters professional social graphs. At the deep end of Mechanical Turk services where work is dispatched by an algorithm (Uber/Lyft/AirBnB/etc.) there are no upward connections to supervisors and managers and officers and no lateral connections to coworkers. This means that working does not provide insider access to potentially better (…

I have noticed that too. If you drive for Uber you don't get much insight into the company, you never talk to a boss to learn something and you don't learn from coworkers. You also don't develop a brand or reputation for yourself.

It's a total dead-end.

Re: The Challenges of Being in the New Contract Workforce

#203

Post by crankylinuxuser »

dragonwriter wrote: post #200
crankylinuxuser wrote: post #196

Earlier quoted context omitted.

Sure, you found some company willing to take your money claiming you had "insurance". In reality, had you actually try to use it, would have been in "pre-existing condition" hell. Because the asthma could have cause $ailment, and they don't cover preexisting. Tood bad, so sad. Glad you paid the premiums!

The other part of precondition hell was recisions, where if you had an expensive condition, the insurance company would look for evidence of a (potentially unrelated) pre-existing condition that had not been disclosed, cancel your insurance based on that (perhaps refunding all the premiums you had paid, for all the good that did you) and call it a day; as part of ending preexisting condition exclusions, the ACA ended…

As someone who was diagnosed with T2 diabetes thanks to Obamacare, I greatly appreciate the work the ACA did. It's not great, but it's a hell of a lot better than what I had prior - nothing.

Re: The Challenges of Being in the New Contract Workforce

#204

Post by ydt »

seangrogg wrote: post #193
ydt wrote: post #191

Earlier quoted context omitted.

I've been doing contract work since 2004 * LLC with S-Corp designation. This is very tax-advantaged vs. Sole Proprietor. * Currently, I'm mostly on-site for one client. * 1-person shop. * I have an accountant. You want a good, small business accountant. * I buy health insurance for my family through the ACA exchange. It's very expensive so make sure you factor it into your rate. I've had 2 FT gigs that lasted 6 month…

Thank you very much for the insight! A few questions, if you would: * What are some recommendations you have for establishing a rate? Do you use hourly, weekly, or project? * What do you look for in a small business accountant (it sounds like you may have had a less-good one in the past)? * What avenues do you typically find yourself using for contract work? i.e. LinkedIn, job boards, word of mouth, etc?

* I use hourly mostly because it is common and is met with the least resistance. Either way, raise your rate at least a little after each gig. Don't get complacent, just keep ratcheting it up.

* I've actually been blessed with a great accountant. He's saved me thousands over the years and sent letters to the IRS on my behalf clearing up a couple issues along the way. I would look for someone who specializes in small, professional service firms that is used and referred by people in your area. If they tell you they don't think you should organize as an LLC, look elsewhere.

* Starting out I used recruiting firms. They have the advantage of an established network and getting you paid every 2-weeks. The disadvantage of course is they take a cut. Their first ask will always be a low-ball hoping they can get a huge margin. Always try to get them to make the first offer and always ask for more. You'd be surprised how much room they have to negotiate up most of the time. As I've made connections over the years I've relied more on my network, but I'll still use an agency to fill the gaps. Also, boutique consulting agencies can be great for sub-contract work. They often need to staff up for a project they just landed, but don't want to take on full-timers and they usually command excellent rates.

Re: The Challenges of Being in the New Contract Workforce

#205

Post by shostack »

paulclinger wrote: post #201
acconrad wrote: post #76

Am I in the minority here for being a contract developer who is happy to be in this place? * I make over 40% more than I did when I was full-time, and I was already in the top band for pay in my title. This far exceeds the 15% markup for self-employment tax. * My wife works full time so she has our back for health insurance * I can save way more for retirement with an SEP IRA than I ever could with a company-sponsore…

> This far exceeds the 15% markup for self-employment tax. It's not even 15% difference, as the salaried workers also pay half of it, so the difference is just the employer portion, which is paid by self-employed contractors. I've been paying for my own insurance (a bronze plan) for the last three years, as it was cheaper than adding me to our family plan. It wasn't very expensive (started around $300/month in WA), b…

>"It wasn't very expensive (started around $300/month in WA), but was going up about 20% each year, so this year we switched to a high deductible plan."

This is what bugs me to no end about insurance. They get you with a low intro rate, then jack it up a massive amount annually, and leave your option as basically switching (if there are better options even available), or shouldering more of the risk by moving to a high-deductible plan (which makes them more money).

Are there no good, consistently-priced insurance options for those who are not full-time employees with benefits?

Re: The Challenges of Being in the New Contract Workforce

#206

Post by adamsea »

Consultant32452 wrote: post #180
mLuby wrote: post #169

Earlier quoted context omitted.

Fundamentally it's lack of time due to having to work 2+ gigs likely while juggling child care or elder care. People with money can pay people to do things for them, freeing up time. Even if they do it themselves, they likely have a more comfortable life so it's easier to devote an evening or a weekend to figuring out complicated medical/legal/financial scenarios.

Do you similarly feel that it's impossible for poor people to buy car insurance? Disability insurance is LESS complicated than that. Do you want the 50% of your current salary or 75% of your current salary option? That's it. Maybe you can pay a few extra bucks for a rider that increases your disability coverage each year as you get a raise. This is not complicated stuff and any insurance agent is going to be happy to…

Poverty impedes cognitive functioning: https://www.frontiersin.org/articles/10.3389/fpsyg.2015.0103...

i.e., being poor is harder than it looks ...

Re: The Challenges of Being in the New Contract Workforce

#207

Post by paulclinger »

shostack wrote: post #205
paulclinger wrote: post #201

Earlier quoted context omitted.

> This far exceeds the 15% markup for self-employment tax. It's not even 15% difference, as the salaried workers also pay half of it, so the difference is just the employer portion, which is paid by self-employed contractors. I've been paying for my own insurance (a bronze plan) for the last three years, as it was cheaper than adding me to our family plan. It wasn't very expensive (started around $300/month in WA), b…

>"It wasn't very expensive (started around $300/month in WA), but was going up about 20% each year, so this year we switched to a high deductible plan." This is what bugs me to no end about insurance. They get you with a low intro rate, then jack it up a massive amount annually, and leave your option as basically switching (if there are better options even available), or shouldering more of the risk by moving to a hi…

Not just that; they keep changing the plans, so that the plan you are currently on may not be available next year, but there is a "similar" one that is 20% more expensive and has worse coverage (and/or higher deductible).

Those contractors that have LLCs may look into group rate insurance, as those are generally cheaper than individual ones (but you may need to have more than one employee to qualify).

Re: The Challenges of Being in the New Contract Workforce

#208

Post by seangrogg »

ydt wrote: post #204
seangrogg wrote: post #193

Earlier quoted context omitted.

Thank you very much for the insight! A few questions, if you would: * What are some recommendations you have for establishing a rate? Do you use hourly, weekly, or project? * What do you look for in a small business accountant (it sounds like you may have had a less-good one in the past)? * What avenues do you typically find yourself using for contract work? i.e. LinkedIn, job boards, word of mouth, etc?

* I use hourly mostly because it is common and is met with the least resistance. Either way, raise your rate at least a little after each gig. Don't get complacent, just keep ratcheting it up. * I've actually been blessed with a great accountant. He's saved me thousands over the years and sent letters to the IRS on my behalf clearing up a couple issues along the way. I would look for someone who specializes in small,…

Awesome! Thank you very much for your time and answers!

Re: The Challenges of Being in the New Contract Workforce

#209

Post by korethr »

sedachv wrote: post #168
korethr wrote: post #69

Earlier quoted context omitted.

As I recall, Obamacare didn't do much, if anything, to decouple health plans from employment. If anything it made it more tightly coupled, by mandating employers with more than so many full-time employees provide health plans. The individual mandate didn't decouple health plans from employers, it just provided additional insult to injury by causing those whom were un- or under-employed and couldn't afford a now even…

> As I recall, Obamacare didn't do much Do you have any actual experience purchasing health insurance before ACA, and later through an ACA exchange? I am not sure what exactly you are "recalling." I purchased health insurance for me and my wife through Covered California last year and found the process quick, the comparisons easy to make, and the pricing clear and reasonable. I have not purchased health insurance mys…

I was laid off in late 2013, shortly before the ACA took effect. When I was laid off, I had the opportunity to keep my existing plan on an individual basis through COBRA. My savings and cash flow would not permit such. Some web searching lead me to believe that I'd be facing similar rates if I went shopping myself, so I opted to go without, and see what happened when the ACA took effect. In the beginning of 2014, I looked at my state's exchange. The plans were now even more expensive, and per the questionnaire on the exchange's site, I was ineligible for the subsidy to make it less-unaffordable because of how much I'd made in the previous year. So I said "fuck it", and opted to eat the tax penalty when I filed my taxes in the following year.

So, no, in my experience, the ACA did not decouple the affordability of a health plan from one's employer -- it made it worse.

Re: The Challenges of Being in the New Contract Workforce

#210

Post by jtmcmc »

Consultant32452 wrote: post #181
acomar wrote: post #171

Earlier quoted context omitted.

The short answer to this question is that they're individually insignificant and Atlus-like in aggregate. The long answer to this question is, in fact, extremely long.

Nice platitudes. Do you believe that poor people are similarly incapable of buying car insurance?

yes sometimes they are - because they are poor. The reason many poor contractors can't afford things like disability insurance is because they don't have the money. They have sub optimal spending habits thanks to poverty traps when they have much less income to begin with.
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