Other Retirement Facts:
A lot of small business owners put so much into their business plan and into their business, that sometimes they overlook themselves. One of their biggest assets and efforts is their business itself, but what about retirement? On today’s episode of the podcast, Phil and Marc talk about the kinds of decisions business owners face, sharing personal experiences and advice for business owners trying to save for retirement.
A hard concept for many business owners is to pay yourself first. In early stages when you’re trying to get the business going this might make sense, but once you’re in a steady growth stage make sure you’re taking care of yourself. COVID showed us that if something happens unexpectedly, you’ll want to be prepared for the worst-case scenario.
Are you paying your future self so that your retirement is taken care of? In retirement, remember that your Social Security may be lower than you think. Are you contributing to a 401(k)? It’s important to build an asset outside of your business.
Are you hoping to one day sell your business? Does someone want to buy it? Did you build a business or did you just buy a job? If you step out of the business, does it still carry value and able to transition to someone else? Make sure to look down the road and have a discussion with a financial advisor and a broker to get a realistic view of what it’s worth.
Along the way, it’s important to carve out some money for yourself. There are a number of options you could consider in order to put money away for retirement, from an IRA or Simple IRA to money purchase pensions. Ask how much can you afford to put away in order to find the plan that fits. Building it into the budget early on can make a big difference as you grow.
If you’re a business owner trying to figure out how to save for retirement, reach out to a financial advisor to find out how you can pay your future self.
Listen to the entire episode or click on the timestamps below to hear what business owners should know.
0:37 – What should business owners know about retirement?
1:03 – Is a good business plan enough?
2:25 – Are you paying yourself first?
3:59 – Your Social Security may be lower.
5:19 – Are you planning to sell your business as your retirement plan?
9:00 – What do business owners need to consider from a tax standpoint?
10:57 – There are a lot of little things to being a small business owner.
Thanks for listening! We’ll be back with another episode next week.
A Quotable Moment:
“You still need to have a 401(k), put money away, just like you would if you were an employee, building a separate asset not tied to your business.”