Most small business owners are too involved with their business’ daily operations that they never really take the time to plan for their future. While retirement may seem far off down the road, if money isn’t being put away to save for retirement, entrepreneurs will never be able to retire when the time comes.
Entrepreneurs’ Strategies for Retirement
With 1/3 of small business owners without a plan for retirement, something must be done to help entrepreneurs put money away for their future. Looking for a way to save money for retirement? Read the following tips:
1. Find a Financial Advisor
Small businesses need to hire an accountant to plan for the future of their business. With the help of a financial adviser, small business owners will know what habits they should be forming to plan for retirement. This financial adviser will also help entrepreneurs plan their personal finances.
Entrepreneurs should hire certified financial planners, as this level of certification ensures that they have their merits guaranteed by the board of the CFP.
2. Start a Retirement Account for Small Business Owners
The certified financial planner will help entrepreneurs navigate their options and accounts. Owners of small businesses should set up a retirement account specific to small business owners.
As some accounts allow business owners to include their employees, this is an added benefit as the business continues to grow.
3. Self-Employed 401(K)
This Self-Employed 401(K) is also known as a Solo 401(K). These plans are used for self-employed business owners, as well as their spouses. Thus, this Solo 401(K) is ideal for sole proprietors, S Corps, and partnerships. These Solo 401(K)s are beneficial because they have generous contribution limits.
4. SEP IRA
This Plan is good for solo entrepreneurs and business owners that have fewer employees. This SEP IRA is simple enough to set up as it has no maintenance fees. This IRA is a good alternative to more formal profit-sharing retirement plans for employees.
5. SIMPLE IRA
SIMPLE IRA, a Savings Incentive Match Plans for Employees IRA works well for business owners with less than 100 employees.
All workers need to prepare for the day that they will leave the workforce. Entrepreneurs should use this guide to help them make an informed decision about what type of retirement plan to choose.