Consider these seven ways to help make your retirement as successful as your business.
1. Create a succession plan.
A realistic succession plan with a solid exit strategy is essential, especially if you’re counting on income from the business after you retire.
Only 36% of small business owners established some type of business continuation plan.
2. Calculate how much income you’ll need in retirement.
Having the retirement you envision requires knowing how much you need to save.
Only 78% of small business owners plan to sell their business to fund their retirement.
3. Start saving.
You can’t rely on your business as a retirement plan since you don’t know what the future holds, so be sure to have retirement savings outside of your business.
About 25% of salable businesses end up having successful exits.
4. Keep contributing to your retirement.
Although it’s tempting to take a break from saving, that rarely works– instead, make small, consistent contributions over time, and you’ll save more than if you made larger contributions later.
34% of entrepreneurs lack a retirement savings plan.
5. Consider a company retirement plan.
If you’re a sole proprietor, the tax savings from a company-sponsored plan could fund your contributions.
Have employees? A plan can help you recruit and reward them while building loyalty.
Up to 100% of employer contributions to a company-sponsored retirement plan may be tax deductible to the business.
6. Supplement your Social Security income.
Only 33% of the average U.S. retiree’s total retirement income comes from Social Security.
The other 67% of retirement income needs to come from other sources.
7. Plan for medical expenses.
Medicare only covers about 62% of basic healthcare expenses.
The average 65-year-old retired couple will spend about $270,000 on healthcare during retirement.
As you plan for the future of your business, it’s important to take the time to plan for your own future.
Learn more about our retirement planning services.
This material is for educational purposes only and should not be viewed as financial, tax, or legal advice applicable to each individual; please consult a qualified professional regarding your individual circumstances.
Sources: Sizing Up Small Business Owners: Product Ownership Trends. Report. Windsor: LIMRA, 2015; FPA/CNBC Business Owner Succession Planning Survey, April 2015; https://www.exits.com/Only_25pct_of_Saleable_Companies_Have_Successful_Exits.html; Manta Survey, 2017; Internal Revenue Service; Social Security Administration, Fast Facts and Figures about Social Security, 2017; Employee Benefit Research Institute, 2017
Copyright © 2020Business Owners
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