There are generally two types of small-business owners. One type plans to stay in the driver’s seat as long as they can. The other type is the one that plans to work hard now so he or she can play hard later. If you fit into either of these categories, the chances are that you’ve got a plan for what you’ll do when retirement age rolls around.
If, however, you’re one of those small-business owners who have difficulty seeing past next week’s payroll, then making long-range plans is probably not your strong point. What you may need are a few smart strategies to get you on track for your retirement. We offer a few of them here:
Have an exit plan
While you may want to remain in your business until your number is up, a better idea is to decide how you plan to move on when your time at your business is done. Do you want someone else to take over and keep the business going? Do you plan to shut it down? Maybe you’re thinking about selling the business but remaining on as a part-time employee or consultant. This could bring you some additional income during retirement. Or perhaps you’ve considered selling your business to someone on a payment plan. That would be another source of income other than Social Security or drawing from savings to fund your retirement.
Call in an expert
Talk to a reputable financial adviser who knows his or her way around the needs of a small-business owner. Do your own homework by reading investing articles on the options available with retirement savings.
Don’t forget to pay yourself
The size of your contribution to your retirement savings isn’t as important as the necessity of making some sort of contribution on a consistent basis. Develop your retirement strategy and get your plan in place, then focus on paying yourself first. You can do this in a relatively painless way by automatically routing money into your savings account at least once a month. You’ll never even miss the money if you never get your hands on it.
Go big
Work with your expert to determine the maximum amount that you can make into your retirement savings each month. The allowed amounts are different, depending on your age. If, for example, you are age 50 or older and your savings amount is lagging behind where it needs to be, you can make larger contributions under the “catch-up” rules governing contributions.
Hold off on drawing Social Security
We’ve all heard the talk about Social Security benefits running out before we get to draw back a dime of the money we’ve paid in. So the thought of delaying our claim for those benefits is a bit scary. But the way the system is set up, if you hold off on receiving your benefits past age 62, you can increase the amount of benefits you receive, up to age 70. It is something worth considering. Thank you to Gabby Revel of Fertile Content for this week’s guest post. Fertile Content is a content creation service, a place for writers to feature their work and for content seekers to find the quality, affordable content they need.
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