Preparing Entrepreneurs For Retirement – OnlineBusinessDegree.org
In the corporate world, it’s (relatively) easy to stay on top of retirement planning. Most companies offer some sort of retirement plan, guidance, and a not-so-subtle reminder to save on a regular basis. But for entrepreneurs, it’s easy to overlook this important step. In fact, according to USA Today, only 2/3 of small business owners have a retirement plan at all. And fewer than half of U.S. small business owners feel well prepared for retirement.
So what happens for the remaining third small business owners who have not planned for retirement? The luckiest of these have spouses enrolled in a business-sponsored retirement plans, but the rest are in a sticky situation. Although retirement planning is so easy to put at the bottom of the to-do list, especially when business is tight, entrepreneurs must begin planning long term. It’s easy to ignore the task, and it’s tempting to say, “I’ll never retire,” you can’t count on your business to be around for you forever. Even if you plan to keep working and enjoying your business until you drop dead, it’s a great idea to have a nest egg available to splurge in your later years, or have available in case you fall ill.
Many options exist for small business retirement planning. Although 401(k)s and IRAs are often confused as strictly corporate outfits, self-employed 401(k)s and personal IRAs are a valid option. Even those with no employees can start their own 401(k), and contribution limits are generous. Although the self-employed do not enjoy the benefit of company-sponsored matching, going it alone is better than doing nothing at all.
Retirement planning doesn’t have to be scary. Financial planners can offer assistance, or you can get started on your own. There is an incredible wealth of retirement calculators available online that can guide you in the right direction. The Motley Fool is a great resource for these, sharing calculators including, What IRA Am I Eligible For?, and How Much Will My Savings Be Worth?. Plus, guides like 5 Steps to a Secure Retirement can give you plenty of information to get started and stay on the right track.
Retirement is probably the last thing on your mind as you graduate and go on to launch a business (or two, or more…), but at a young age, time is on your side. Set up a great retirement plan now, and you’ll have many more years to maintain it and watch it grow, rather than scramble to make things work as you get ready to retire.