Saving for Retirement When Running a Small Business
 
Saving for Retirement When Running a Small Business

Are you a small business owner? If so, are you ready for retirement? Whether you are only thirty years old or if you are fifty, retirement should be on your mind. Small business owners are 100% in charge of their retirement. If you don't start acting now, you may find it difficult to stop working and retire in a timely matter.

As previously stated, you will want to get started with saving for retirement as early as possible. Small business owners are encouraged to start planning for retirement in their thirties or even earlier. Why? Because setting up retirement savings accounts, such as an Individual Retirement Account (IRA) can be harder for small business owners. Often times, more paperwork is needed and extra verification is often required. For that reason, the earlier you start, the better your financial situation will look when it comes time to retire.

One step that you will not want to take involves relying on the sale of your business. Unfortunately, this is where many small business owners find themselves in trouble. Many believe that they can sell their business and live off the profits. Yes, this may happen, but you may be surprised to learn how slim the chances are. Even if your business turns a nice profit, you still may not have any buyers. Many entrepreneurs like to start their own businesses from the ground up and not everyone has the funds needed to purchase a profitable and well-established business, like yours.

Since you are encouraged to not rely on the sale of your business for retirement, you may want to refrain from selling. How many employees do you have? If you have one or more employees, can you work with and train someone to take over your position? If so, you can retire and still collect profits from your business. If you must hire an employee to replace the worker you promoted, your profits may slightly decrease, but you should still have enough to survive throughout your retirement. If worse comes to worse, you can always return to work.

As a reminder, no matter how successful your business is, you should not rely on it as your only source of income during your retirement years. That is why you should also examine popular retirement saving accounts. Aside from a traditional savings account that you deposit extra business profits into, you should examine 401(k) programs. Unfortunately, many small business owners do not know that they exist for them. They do. A Single Participant 401(k), also commonly referred to as a Solo 401(k), may be perfect for you. They enable business owners who don't have employees to save money for retirement. Higher contributions are also allowed.

When it comes to creating a Single Participant 401(k) or a Solo 401(k), you may want to speak to a financial advisor. This is because companies that offer these types of plans and programs can be difficult to find. They are out there, but you may need help finding them. Also, consulting with a financial advisor cannot do you any harm. In fact, you may learn additional tips and techniques for saving for retirement as a small business owner.


Speaking of additional tips, it is important to not put all of your eggs in one basket. As previously stated, do not rely on your business to get you through retirement. Also, do not rely just on a 401(k) plan. Depending on your contributions, such as how often you paid your taxes, you should also qualify for social security benefits. You can estimate your benefits by contacting the United States Social Security Department, but still don't rely on it. On average, it only covers about 30% to 40% of income needed during retirements.

To stretch your money to its fullest extent and to properly and safely prepare for retirement, examine 401(k)s for small business owners, SEP-IRAs, SIMPLE IRAs, stocks, and bonds. In the event that one of your options does not pan out, you still have savings to fall back on.

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Articles
Forced Into Retirement? What You Should Do

How to Find Retirement Communities

How to Meet New People After Retiring

How to Plan for Your Retirement

How to Save for Retirement on a Limited Budget

How to Save Money After You Retire

Are you getting ready to start preparing for your retirement years? Whether you are 30 years old or 50 years old, this is an important step to take

Professional Retirement Help: Where Can You Turn

Retirement Checklist: Are You Prepared?

Retirement Planning: 5 Reasons You Should Meet a Financial Advisor

Retirement Planning Mistakes You Need to Avoid Making

Retiring: Should You Rent or Own a Home?

Saving for Retirement at 20

Saving for Retirement at 30

Saving for Retirement at 40

Saving for Retirement at 50

Saving for Retirement at 60

Saving for Retirement When Running a Small Business

Saving for Retirement When Working from Home

Saving for Retirement: Why Flexibility is Important

The Best Ways to Save for Retirement

Tips for Choosing a Retirement Community

Tips for Helping Your Parents Plan for Retirement

Tips for Saving for Retirement

Why Saving For Retirement Is Important

 

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This site is a common sense guide to Saving for Retirement When Running a Small Business. In practical advice websites, like anything else in life, there are no guarantees of income made. Readers are cautioned to reply on their own judgment about their individual circumstances to act accordingly.

This site is not intended for use as a source of legal, business, accounting or financial advice. All readers are advised to seek services of competent professionals in legal, business, accounting, and finance field.

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