I was reading this report by the Exit Planning Institute, about a study on business owners and their readiness to retire. The result really surprised me! There were two statistics that I thought I needed to bring to your attention. These stats literally just blew my mind. I mean they are just seriously unbelievable!
One of the biggest benefits you will enjoy if you are self-employed is that there are more (and some would argue better) retirement options and plans available to you than are available to most taxpayers. You still have the ability to use the ROTH IRA and Traditional IRA. But being self-employed gives you three additional retirement savings options: SEP IRA, SIMPLE IRA, and Solo-K. With all these choices, how do you know which is the best retirement plan for the business owner like you? We will explore the pros and cons.
Recently, I had a client recently that have a question about his ten-year plan. He’s going to be selling his business, and we are building the value of it up for him to sell. Along with his business, he has this really, small retirement account. Most business owners don’t focus on their retirement accounts that much. I’m one of them. I don’t focus that much on it. For the most part, I mainly focus on my business. I mean I do have retirement accounts; however, it’s just not something I, or most other business owners, spend a lot of time on.
One of my all-time favorite quotes is the one about compound interest that’s attributed to Albert Einstien. “Compound interest is the eighth wonder of the world. He who understands it earns it. He who doesn’t, pays it.” You will probably see that quote a million more times on my blog because it is one of the truest concepts ever! Sadly too many fail to understand and grasp it. Here’s an example to help you recognize the importance of compound interest if you don’t.
As a business owner, I know how easy it can be to get caught up in the hustle and bustle of running a company. You can get so busy that you even forget about saving for your retirement. That’s never a good idea though. Recently someone contacted me on Twitter asking this, “Justin, I’m a new business owner, and I have some extra funds? Should I start contributing to my retirement now?” That’s great that this new business owner is already starting to think about retirement! However, there is a process. Check out this video to see my answer. There are three main points you need to consider as a business owner before you ever start contributing to a retirement account. 1. Have a business emergency fund. That means you have at least one month’s worth of company expenses set back. If you run at $50k a month, you’d have […]
According to the Small Business administration, over 50% of all employees are employed by small businesses. Since 1990, large companies have eliminated 4 million jobs while small businesses have generated 8 million new jobs. If you collected all the small business employees and created a new country with them, they’d be the 17th most populated country in the world. Small businesses are the haven for innovation. They are twice as likely to produce innovative ideas with small business employees generating 13 times more patents per employee than large companies. Small businesses and their owners are an essential component of the U.S. economy. Despite all the good that small business owners provide, there are many misconceptions about small business owners.Here are three misconceptions I hear all too often and their realities.