As a business owner, you are responsible for funding your retirement program, so prioritize your retirement fund. Retirement income planning means that you have thought strategically about the income you will receive throughout your retirement.
It’s easy for business owners to put retirement planning on hold because they have more pressing matters to deal with. Yet planning for retirement is an essential part of being a business owner. You don’t want to put off planning until later in life. The earlier you start, the more in control you will feel.
How much you should save for retirement
How much you save for retirement is a common question whose answer depends on the lifestyle you want to maintain in retirement. Someone retiring debt-free, mortgage-free, and planning to live a quiet retirement close to home will need a lot less than someone planning to travel the world. Knowing how much you should save for retirement will depend on your retirement goals.
How to start planning your retirement fund:
1. Set a monthly budget to spend on your plan
It’s never too late to start saving for retirement, so you can start today if you haven’t started yet. Even if you’re unsure of your financial goal, start by setting aside as much as you can today to fund your future.
2. Consult a financial advisor
Professional financial advisors have the tools and skills to help you plan for your retirement in terms of how much to save and what investment products you should invest in. Beware of financial advisors who sell financial products, as their advice may be biased. Paid financial advisors offer unbiased retirement solutions because their income is not reflected in the products they sell to you.
3. Take advantage of your country’s retirement savings programs
If your government has incentive programs for retirement savings, it may be in your interest to take advantage of them. The IRS has provided a list of retirement plans for the self-employed. You can work with your financial advisor to determine the best route for you.
4. Make your business a salable financial asset
It makes good financial sense to start a business to generate income and make that business a financial asset that you can one day sell to create more income for yourself. Having an exit strategy for your business makes economic sense.
Ultimately, good retirement planning will help secure your financial future. The goal is to retire with enough income to fund your retirement dreams. Retiring without a financial plan will lead to financial stress and lack of money or keep you at work beyond the time when you would have preferred to stop working. Your retirement years are labeled your golden years for a reason, so get ready for financial freedom in retirement.