May 2021

Retirement basics for small business owners

As a small business owner, you wear a lot of hats. Every decision — no matter how big or small — crosses your desk. With so much to think about, it's no surprise when long-term retirement planning doesn't get the attention it deserves.

According to an article on Bank of America's Small Business Resources site, a retirement decades in the future might seem like an abstraction (and a distraction) when there's an enterprise to run with endless day-to-day demands. The article goes on to explain the advantages — and disadvantages — of several different types of IRAs and 401(k) plans.

There are lots of reasons why small business owners put off dealing with retirement planning. In a recent study, 35% of owners surveyed reported that they actually started their businesses to fund their retirement. These same owners said they were depending on income from the sale of their businesses to retire. This explains why many entrepreneurs choose to plow their money back into their businesses, rather than use it to fund their retirement.

One advantage of saving for retirement is that it can result in significant tax savings. A retirement plan can also help you attract and retain employees — especially if they're considering offers from larger firms. Many workers place a high priority on retirement benefits when choosing an employer.

Even if you love your work and plan never to retire, it's a good idea to get together with someone who can offer you advice on putting together a retirement package. To learn more, read the article on our Small Business Resources site.

To discuss your business goals, set aside some time for a telephone call with a Small Business Specialist.

MAP3570161 | 4/2021