The "golden handcuffs" are coming off.

After nearly a decade of rising salaries and expensive perks, corporate America is retrenching. Employee benefits -- the so-called golden handcuffs that financially and psychologically bind workers to companies -- are becoming a casualty of the foundering economy and soaring health-care costs.

For many workers, the benefits scale back is the final indignity. Stung by salary freezes and loss of bonuses, many skilled workers facing benefits cutbacks are wondering whether it's smarter to go it alone.

"The loss of benefits, the ambiguity caused by war and the threat of terrorism and layoffs, and the loss of moral compass by corporate executives," is leading many skilled workers to question what it is they're working for, says Steven Berglas, a clinical psychologist and career coach at Lloyd Grief Center for Entrepreneurial Studies at the University of California. "I'm seeing many more people ask, 'What am I investing in?'"

Yet, while the financial perks of a corporate job may be declining, there are considerable risks to going solo - beyond the loss of a regular paycheck. Let's look at where companies are scaling back on benefits, and compare the losses to the additional financial costs you may incur out on your own.

Scaling Back Benefits

While companies have been steadily cutting back on insurance coverage amid soaring health-care costs, many now are looking to trim expenses related to retirement savings plans as well.

In the latest example, discount brokerage giant Charles Schwab Corp. announced it would eliminate the employer matching contribution to its employees' 401(k) plans, in one of many cost-cutting efforts to stem a rising tide of red ink. A recent study by the Profit Sharing/401(k) Council of America in Washington also showed that employers have been scaling back contributions to retirement plans as well, in general matching 2.5% of total pay in 2001, down from 3.3% in 1999.

Gary Coaxton, director of the healthcare marketplace project at The Henry J. Kaiser Family Foundation in Menlo Park, Calif., says it's a trend being seen everywhere from Fortune 500 companies to mom-and-pop shops.

A recent survey by that foundation showed an overall increase in benefits costs borne by the employee. "Across the board, deductibles and copays went up, and employees are accounting for a greater amount of their own retirement contributions." More troubling, the survey showed companies plan to continue cutting back on benefits moving forward.

Why Bother?

For some people, a cutback in benefits makes them even more risk averse. "The environment being what it is, I don't see that many people are leaving their jobs to strike out on their own right now if they don't have to," says Rob Chernow, the self-described entrepreneur-in-residence at the Kauffman Center for Entrepreneurial Leadership in Kansas City, Mo. "What people are doing is playing it safe and keeping their jobs."

For others, though, the slashes are the last straw on their road toward self employment.

"People who are prone to do entrepreneurial endeavors really crave control, and when you lose control of an essential employee benefit, like a retirement savings plan or health care, there's an unsettling feeling of 'nothing is sacred now,'" says Mr. Berglas of the University of California. In fact, in a recent Wall Street Journal Online/Harris Interactive health-care poll those surveyed between the ages of 25 to 39 said they would be very likely to consider changing jobs if an employer raised the cost of health-care insurance by just $100 a month.

The worker most likely to choose freelance over a full-time corporate job in the event of salary or benefits cutbacks is the so-called armchair entrepreneur, says Rosalind Resnick, founder and chief executive of Axxess Business Centers, a New York-based small-business advisory service. "These are workers who have a hobby or special skill that they hope to turn into a profitable enterprise," she says. "They typically pursue their dreams while holding down a full-time corporate job."

The Price of Going Solo

If you are pondering the jump, it's important to know the financial implications. Take health care. The Consolidated Omnibus Budget Reconciliation Act of 1985, best known as COBRA, provides an 18-month continuation of workplace health insurance at discounted group-plan rates after an employee leaves a job. But that discounted rate can be surprisingly steep, because the employer is no longer subsidizing the payments.

"For most individuals, it's still going to be far cheaper to stay in an employer group health plan than to go out on and buy individual protection on your own," says The Kaiser Family Foundation's Mr. Coaxton. But certain individuals may find it financially viable to go it alone.

Depending on location and the type of benefits sought, COBRA premiums can typically range from as low as $2,400 a year for a no-frills plan with a high deductible for a family of four, to more than $12,000 a year for a plan that includes additional benefits, such a dental. Younger individuals with no dependents will usually get the best rates. (To get an idea on what you'd pay in health-insurance premiums, check out insurance-quote Web site Ehealthinsurance.com.)

As for retirement savings plans, you might not feel their absence immediately. But over time, foregone employer matching contributions can be the biggest opportunity cost of entrepreneurship. The loss of contributions adds up to billions that workers won't be able to save for retirement.

While matching contributions may seem like small potatoes initially, the growth potential can't be denied. For example, a 30-year-old who makes $50,000 and maxes out on his employer matching contribution (up to 6% of his salary) will see a yearly $3,000 match grow to $186,540, assuming a conservative 6% rate of return, by the time he retires at 65.

If your company has done away with a retirement savings plan altogether, or never offered one in the first place, there are significant benefits to being self-employed. The Department of Labor provides "Small Business Retirement Savings Advisor" tool, that can help you determine what options may be available to you should you decide to go solo.

In addition to small-business retirement plans, such as 401(k) plans, simplified employee pension, or SEP plans, and Simple IRAs, self-employed individuals can set up profit-sharing and other qualified plans that are protected from creditors in the event of a lawsuit. You can also create your own employer match, which has the double benefit of boosting your retirement while cutting your taxes.

And speaking of taxes, would-be entrepreneurs should be prepared for a crash course in dealing with the IRS - and for paying more in taxes. While your employer now handles the burden of withholding earnings to cover federal, state, local, Social Security, Medicare and other taxes, you'll face all that and more -- particularly if you anticipate hiring employees.

Workers who are thinking about shedding their corporate skin to open their own business should sit down with an accountant who specializes in small-businesses to assess options on how to structure the business to get the most tax benefits (should you go with a sole-proprietorship or limited liability corporation?) and determine whether to set aside cash now to cover estimated taxes for 2003. Solo freelancers should get some advice too on issues like the home-office deduction.

Finally, benefits and taxes aren't the only financial considerations when deciding on whether to start up your own business or freelance. As chief (or sole) executive, everything from the legal bills to the phone bill will come directly out of your pocket.