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For Your Small Business November 6, 2020

5 steps to a secure retirement plan for business owners

When you're planning for how you'll manage your finances when you're retired you can't be hasty. Retirement planning is perhaps a multistep process, and it evolves with time.

That being said, retirement planning for the service class and business owners is not the same. In most cases, the service class receives provident or pensions when they retire. But, not the business owners.

Another difference is the fact that business owners still own a share or a portion of their business when they retire. This makes it more complicated for business owners to choose the right retirement plan.

Nevertheless, we have broken it down into 5 easy steps. You can follow these steps to find a retirement plan for when you're no longer employed.

  1. Think About When Would You Like to Retire

The time you have until your retirement is the most crucial part of retirement planning. And of course, it is also the initial step. Everything falls only after you decide a tentative age when you are most likely to retire. It could be your sixties, or it could be your eighties. And accordingly, your retirement plan would need alterations.

  1. Decide How Much Will You Be Spending

This might seem a tough nut to crack but if you do it the right way, it isn't. Think of the essentials first. For example, how much will you be spending on your utilities, monthly bills, medicines, and food? Moving further, think of things and activities that you've been longing to do for a long time, but haven't found time to pursue, because you have a business to manage. For example, it could be ticking off some adventurous locations from your bucket list. Considering these expenses would give you an idea about how much you will need monthly.

  1. Make Sure That You Evaluate the Risks Involved

When you're investing in mutual funds or any other such investment plans, there's a substantial amount of risk involved. Even your financial manager tells you about it. The mutual funds market is a highly volatile investment. They are better for long term investments, usually.

  1. Calculate Your Returns After Paying Your Taxes

By now you might already have a few plans with you. For example, you might be considering investing in mutual funds, or pension plans. An important factor that you should consider along is calculating your returns after paying your taxes. Of course, most of the investment plans are not exempted from taxes. And you wouldn't want your savings to be paid out in taxes only.

  1. Consider Investing in Real Estate

It might be surprising to you, but most of the millionaires around the world have earned their wealth from real estate investments. You need not invest in real estate alone, but you must make it a priority.

Retirement planning is gaining traction in recent years, more than ever. Increasing living costs are only one of the many factors driving this trend. All in all, skipping on your retirement plan shouldn't be anywhere close to your thoughts, whether you're a business owner or not.

You have plans. We have ideas. Let's talk. OldNational.com.

This article was written by SmallBizViewpoints from Small Biz Viewpoints and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.

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