Most small businesses have some type of Business Plan or road map that they prepare and follow each year. It may be a one-page plan or a more sophisticated plan. It usually contains a plan for growth of the business value but NOT the growth of your personal retirement plan. Often the business plan is narrow and specific to your business with little diversification. A recent study conducted by The American College found that 40% of small business owners have NO retirement savings or pension plan in place. Social security is NOT an acceptable retirement plan. Too often, younger business owners are engrossed in building their business with a very good business plan but no retirement plan---after all they plan to live forever, remain healthy, and use the business as their retirement plan. How did that work for contractors and real estate firms in the last 5 years? A couple of recommendations from the experts include investing in both IRAs and SEP. These plans defer taxes and diversify your retirement dollars OUTSIDE your business assets. Some recommend buying real estate via a Real Estate Investment Trust or specific properties such as office buildings, rental property or agricultural lands. Some annuities and gold might even be advisable but the main thing is to start some kind of Retirement Plan in conjunction with your Business Plan. If you have a Retirement Plan, visit it often to check on the progress.
Do you have a business plan AND a retirement plan?
Written by ISU Papineau Insurance on Sep 28, 2012