Retirement Planning for Entrepreneurs
Most of the time, entrepreneurs are caught up with the stresses and details of running a small business and sometimes don’t have the time or resources to plan for their own financial future. In fact, 75% of small business owners revealed in a recent survey that they had less than $100,000 saved for retirement.
And while this is understandable, it would be a crying shame to have an exciting journey of building a small empire, only to have nothing to show for it when retirement comes around.
It’s never too late to start preparing for retirement. And while the sometimes unpredictable nature of small business can make your monthly financial planning, well, unpredictable, here are some steps you can take to gain control of your retirement plan:
Your business is not a retirement plan
Emptying out your retirement fund (if you have one) may seem like a mini stimulus package to get your company going in times of need, but it won’t do you any good when retirement finally comes around.
It’s important to set up a financial safety net that is completely separate from your business. After all, you are the one who will be retiring, not your company.
So set up a solo 401k or an IRA or talk with your financial advisor, and work out the best spread of your resources across stocks, bonds, mutual funds, etc.
Make your savings an automatic process. It can be difficult to set aside your savings when your monthly income is variable.
You can do it one of two ways:
1. Review your past earnings, and determine an average, calculating what amount should be contributed to your savings every month.
2. Take 10-15% of every pay check that comes in, and put it straight in your savings plan, right off the top. In other words, PAY YOURSELF FIRST.
Find a good advisor
There are opinions all over the place with regards to savings and financial advice. Find yourself an advisor who you can trust, someone who will offer a sensible middle ground approach, and secure a financial future for you, your business, and your family.
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