Own A Small Business? Planning Tips for Your Retirement
Retirement looks different for everyone.
Retirement is meant for relaxation, reflection, and enjoyment. But, without the right planning, you might find yourself stressed.
This is especially true for young entrepreneurs. Most of whom don’t have access to the same group plans or employer-matching programs offered by major corporations.
Keep reading for tips that even the busiest of entrepreneurs can handle.
Think of Your Retirement Goals
Do you know when you would like to retire? Or what type of lifestyle you want during it? If not, it’s time to start thinking! Because all of these are questions you should be asking yourself.
You should know how long you have to save. Even if it is just a ballpark range (for example between the age of 65-70). This will give you a framework for how long you have to save.
Plus, the type of lifestyle also influences planning. Some people may want to retire in the sun. While others might want to travel, volunteer, relax, or work part-time.
Regardless of what you decide, every lifestyle will cost a different amount. So, having an idea of what you would like to be doing is necessary to know how much you should save.
Consider Your Business Goals
For a stress-free retirement, you need to consider your business goals. Every owner understands that they will need to step away from the company at some point. However, this can be done differently for everyone.
Consider if you would want the business to be transferred to a family member, or if you would prefer it to be sold. Another option might be to sell it to a partner, employee, or third-party.
Knowing the different possibilities enables you to plan according to your goal. Otherwise, without a goal in mind, it can seem overwhelming.
Speak with a Professional
Once you’ve throughout through the different scenarios for your company, speak to a professional. No one should have to plan their retirement alone. After all, this can be a very daunting process.
Plus, given the different types of accounts, plans, and programs you’ll need someone to walk you through the options.
Consider speaking to an advisor, lawyer, or accountant. Like us here at A.P Accounting and Tax Services. Where our trained professionals are able to answer all your questions. Plus, we might even suggest things you hadn’t thought of. For example, real estate planning, retirement savings plans, tax investments, or federal programs.
Otherwise, not knowing what you have available can be detrimental.
Research Options
Some owners want to fund their retirement by selling the business. Others might want the security of a savings plan to rely on.
However, knowing the risks involved with either of these options is crucial. After all, relying on the sale of a business can be risky. Any owner thinking of this should have their company appraised at fair market value. And, understand that this valuation might change with time.
Sticking with a ‘more secure’ option (such as an IRA or 401(k)) also needs to be researched. Although these are the more popular option, it might not be right for you. There are also a number of different types of accounts within them. For example, a Solo 401(k) vs a solo Roth 401(k). But, what is best for you should be discussed with a professional.
Ultimately, everyone needs a solid retirement plan. Even busy business owners! Speaking with a professional, like us here at A.P Accounting and Tax Services can make it easy. Call or email us today to discuss your financial future with our team.
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