- By Emma Andrews
- Posted November 20, 2020
How Entrepreneurs Can Start Preparing for Their Retirement
There are many extraordinary benefits of entrepreneurship. You don’t have a boss. You can choose what you want to work in. Not to mention that the financial gains can be significant. However, there are a few drawbacks. Aside from the increased risk, entrepreneurs are generally 100% responsible for their own retirement. You don’t have a business setting you up with a matched 401k or a pension. So, how do you take care of yourself in your old age?
Figure Out Your Retirement Needs
First off, you need to start by figuring out what you need for retirement and what the costs are. Your main costs will be a place to live, food, and healthcare. Keep in mind that your healthcare costs are going to significantly increase as you age. You may want to take a look at your family’s medical history and prepare for potential problems that run in your family. The earlier you want to retire, the more you are going to need to have saved up. Fortunately, according to Bankrate, there are several retirement savings accounts available to entrepreneurs like Roth IRAs and Solo 401(k)s.
Start Selling Your Business
After all the hard work that you’ve put into your business, cashing out can be a great way to add a nice chunk of change to your retirement account. Even if you don’t want to completely exit your business, according to Josh Freeman, splitting your business into sellable assets gives you additional freedom. You can start taking on a smaller roll. This will allow you to enjoy your retirement. As you work on selling your business, make sure that you choose a qualified and trustworthy lawyer. They can help make sure that you get the best deal possible.
Shift into Passive Income
One of the best ways to secure a comfortable retirement is to gain passive income. You can do this through stock market dividends or through setting up your business to be run without your supervision. While achieving passive income shouldn’t stop you from setting up a retirement account, you can have more peace of mind that your retirement account won’t run out. If you have achieved passive income, according to Oberlo, you may want to consider what happens to those assets when you die. Make sure to consult with a lawyer so that you can ensure that they are passed on to the right individuals with the least amount of hassle.
It can be difficult to set aside money for the future. This is especially true for entrepreneurs that are trying to get their businesses up and moving. However, investing for the future is at the very heart of business. You need to make sure that you are taking care of both your present and future self.
We can help your business to create a financial plan that will benefit your whole company. Contact us to get started!