As a business owner, you are working towards your short and long-term goals at the same time. Retirement, for instance, might feel like a long-term goal, but the earlier you start thinking about your retirement, the more beneficial it will be for you. Even if you do not plan on retiring for decades, now is a great time to begin thinking about your shift from work to retirement. Here are some retirement tips for business owners.
Calculate Your Estimated Living Expenses
When thinking of retirement, you need to factor in the cost of living. Once you stop working, it is very important to make sure you have enough money saved to continue to live comfortably. This figure could vary significantly depending on several factors, such as:
- The location where you will retire.
- Any medical issues or risks that could increase costs.
- How your current life compares to your retirement plan.
- Whether you may occasionally work while retired.
- Cost of living where you will retire.
It is a good rule of thumb to save a portion of the earnings from your business for your future plans. There are a number of resources to help you calculate this cost, and it may be more beneficial to hire a professional retirement advisor to assist you.
Consider a Diversified Retirement Plan
Once you have a general idea of how much money you will need, the next step is to figure out how to make that money. Investing in a retirement plan is one of the best methods to help you reach your retirement goals. There are a few different options for retirement plans for business owners. If you run your business by yourself, you can choose a SEP-IRA or Solo 401(k), both of which offer savings in the form of tax deductions. For small businesses with under 100 employees, a SIMPLE IRA or 401(k) will allow you and your employees to make contributions to your plans before taxes.
Consult a Professional
It is possible to plan your retirement on your own. However, consulting a financial advisor will only benefit you in the long run. A financial professional can help you decide how much money you need to save, which retirement plans and investments will benefit you, and how to protect financially yourself during the transfer of your company to a third party.
No matter where you are in your retirement planning process, a financial advisor can guide you on the right path.
Contact Bowman & Company CPA Today
Bowman & Company CPA, PC provides all of our individual and small business customers with experienced, accurate, and affordable financial services. Our financial services aim at decreasing your taxes and increasing your net worth through responsible, timely, and accurate recordkeeping. We offer our services to clients throughout the Washington, D.C. metropolitan area including Maryland and Baltimore County, Columbia, and Howard County. For more information on our offerings, contact us online or call us at (410) 381-8121. You can also find us on Twitter, Linkedin, Facebook, and Youtube.