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Balancing your personal and professional priorities while launching and growing a business is challenging. You have countless responsibilities and too few hours in the day. Often, in the midst of fulfilling your professional priorities, you end up putting your personal financial life on the back burner.

If you have not prepared for your retirement, you are not alone. Many entrepreneurs think growing a business is all they need to retire. However, just having a business does not automatically mean you have a retirement strategy in place. 

Download 5 Retirement Mistakes Small Business Owners Make for a helpful overview of what you might need to address.


Strategy 1: Define Your Retirement Plan

Without a documented strategy—one that goes beyond the hope of simply selling your business or passing it to your family—you could end up pushing back your ability to retire.

• Define your ideal retirement. Clarify when you want to retire and what lifestyle you hope to enjoy.

• Determine the actions needed to fill the gaps between your current assets and the income you will need to support your desired retirement.


Strategy 2:  Have an Exit Strategy

No matter how long you want to work and how much you love your business, you need a clear exit strategy to help foster your company’s longevity and preserve your financial health.

• Define your ideal exit strategy. Do you want to sell your business? Pass it to the next generation? Find an outside successor?

• Hire a qualified professional to determine the real value of your business as it is today. Depending on how far you are from retirement or exiting, you might need to revisit this
valuation in the future.

• Create a strategy—and stick to it. Your exit strategy might require you to hire new people, adjust your services, or implement a number of other changes.

Learn more about planning your exit strategy


Strategy 3: Separate Your Retirement Savings

Would you and your family be able to enjoy a comfortable retirement without your current income or profits from selling your business? If the answer is no, now is the time to start building your savings.

• Balance your personal and professional finances. When deciding how to invest your available assets or what salary to draw, make sure you focus on addressing both sides of your financial life.

• Explore available retirement-savings tools with your financial professional. With the passage of the SECURE Act, many rules regarding retirement plans have changed, making this a great time to evaluate your strategy.

• Review your budget and create a disciplined savings approach. Identify ways you might be able to trim your current expenses or save on your tax liabilities. Also, establish a habit of regularly contributing to your personal retirement savings.


Strategy 4: Get Sufficient Life Insurance Coverage

The role life insurance may play for small-business owners can be more complex than for the typical individual. 

• Analyze your current life insurance coverage. Do you have the right tools? Do you have unrecognized gaps?

• Address your family’s life insurance needs. Calculate your total debts and expenses to find the amount your family would need if you were to pass away prematurely.

• Uncover the opportunities life insurance may bring to your business. Work with a professional to determine how life insurance might be able to help support both your business needs and retirement goals.

*Several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.

Strategy 5: Hire Outside Support

As a business owner with both personal and professional financial planning you need to stay on top of regulatory and tax law changes. Professional support can help.

• Determine what professional support you need. You likely should consider hiring a tax professional, attorney, and financial professional. Your unique circumstances might require additional support.

• Ask your professionals to work together. Aligning your financial life requires an understanding of how the many facets work together. A 'financial quarterback' can help make sure your support team has a clear picture of how your various pieces intertwine.

• Embrace the benefits of working with outside professionals. Choose highly-qualified, knowledgeable professionals and let them take some of the weight off your shoulders.

Keep in mind that this article is for informational purposes only. It’s not a replacement for real-life advice. You should discuss any tax, legal, or financial matters with the appropriate professional.


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