The Need For Retirement Planning
A recent study commissioned by the Principle Financial Group showed that the majority of small and medium business owners have no plans in place for retirement.
Among those surveyed, nearly seven out of 10 owners (66%) report they do not have an exit plan to transition their business in the event of death, disability or retirement.
The study also goes into detail about owner benefits vs. employee benefits and the lack of life insurance for owners and key employees.
I realize that in ‘the heat of battle’ of running a small business that you may put off thinking about retirement but, come on, are you going to work til you drop dead?
The longer you contribute to a retirement plan the better off you will be. There are tons of options, at least in the U.S., like IRA’s, 401-(k)’s, SIMPLE and SEP’s. Talk to an accountant or retirement specialist to find out what your options are.
Since you will be declaring all of your profits as personal income it makes sense to find a tax-deferred program for your retirement.
You also need an exit strategy from your business. Most small business owners should progress from working their business to running their business to supervising the managers that are running your business.
That will eventually put you in a position to sell your small business or at least take a less active role in the day-to-day operations.