Retirement Roadmap for Small Business Owners
Small business owners are an essential component of America’s economy. In the United States, 99.7% of all firms are comprised of small businesses with 500 or fewer employees.1 However, small business owners often spend an exorbitant amount of time and energy building their companies— which can make focusing on their personal financial future challenging.
Building, running, and growing a company can be tough. Often, in the midst of fulfilling your professional priorities, your personal financial life is placed on the back burner. Believe it or not, you’re not alone. Many entrepreneurs see their growing businesses as a means to retire. Furthermore, many start retirement plans when the business is first started and don’t often review whether the approach still works for the business. However, just having a business does not automatically translate into having a retirement strategy in place. Without a roadmap—one that goes beyond the hope of simply selling the business or passing it to family—you could end up pushing back your ability to retire. In one survey, one-third of respondents said they have no retirement strategy, while 34 percent said they’ll look for new job opportunities after they retire from their business.2
Delaying retirement isn’t always an option, and life often brings surprises. For example, certain health challenges may cause you to retire early. A valid concern is that only 31 percent of retirees were very confident in their ability to cover medical expenses during retirement.3
To help ensure that you can retire on your terms, you need to be proactive and address the following items as soon as possible.
- Define your ideal retirement. Clarify when you want to retire and the lifestyle you hope to enjoy.
- Build strategies to attend to your retirement. Determine the actions you must take to fill the gaps between your current assets and the income you will need to support your desired retirement lifestyle.
- Hold yourself accountable. Do not let the busy life of business ownership keep you from staying on track toward the retirement you desire.
Launching and growing a small business is a challenging and time-consuming endeavor. This is why in times of economic fluctuation and changing regulations, we believe it is critical to seek guidance. Please reach out to one of our advisors with any questions you may have about your business or personal retirement plan.
1 SBECouncil.org, 2022
2 AllBusiness.com, 2022
3 EBRI.org, 2022
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