owners have no retirement savings or pension plan in place.
Furthermore, the study found that three-fourths of those owners have
no written plan as to how they intend to fund their retirement.
Small business owners know the value of a solid business plan.
Unfortunately, too many of those entrepreneurs neglect to place the
same effort in planning for their retirement. Business owners focus so
much on growing and maintaining their business, that often their own
retirement is put on the back burner.
"It's important to have personal retirement savings outside of your
business because the value of that business can fluctuate
significantly over the years," says
President, M&I a part of
retirement nest egg is important should the unexpected arise, such as
a major health issue or needing to sell the business sooner than
for small business owners on how to effectively save for retirement:
— Take care of yourself – Invest in yourself, not just your business.
As a small business owner, the instinct is often to invest back into
the business. However, it is very important to pay yourself as well,
especially when planning and saving for retirement. Relying on selling
the business to fund retirement can be a risky approach that does not
— Invest in an IRA and SEP – Having a diversified financial plan,
including both an IRA and SEP, is a great way to accumulate wealth
outside of the business. Investments in these plans grow faster due to
tax-deferred compound growth, and IRAs and SEPs with conservative
holdings are effective during times of instability, offsetting the
volatility of business returns. SEPs can provide great tax benefits by
reducing the owner's taxable income.
— Team of experts – Surround yourself with a group of experts,
including a financial professional who specializes in small business,
an accountant, a tax specialist and a lawyer. They can offer sound
advice and provide insight on how to build your retirement savings
independently of your small business. A financial professional can
also help develop a detailed financial retirement plan that outlines
your goals and progress.
— Explore other investment options – Consider other investment
strategies that will help build your retirement savings like investing
outside of your IRA and SEP. It is also important to take precautions
against the unexpected, like an illness or disability, by considering
life and disability insurance.
As with any investment, you should consult with a tax advisor to
determine what works best for your personal goals and financial
"Although it's tempting to concentrate solely on investing in their
business, small business owners owe it to themselves and their family
to have personal retirement savings to help ensure a comfortable
retirement," says DiVito.
To learn more about how to financially prepare for retirement, please
About BMO Harris Bank Based in
a broad range of personal banking products and solutions through over
650 branches and approximately 1,350 ATMs in
expertise, local knowledge and mid-market focus throughout the U.S.
Deposit and loan products and services provided by
American financial organization with 1,600 branches, and a retail
deposit base of approximately
that we notify you that this information is not intended to be tax or
legal advice. This information cannot be used by any taxpayer for the
purpose of avoiding tax penalties that may be imposed on the taxpayer.
This information is being used to support the promotion or marketing
of the planning strategies discussed herein.
to clients. You should review your particular circumstances with your
independent legal and tax advisors.
About the BMO Retirement Institute
provide thought-provoking insight and financial strategies for
individuals planning for, or currently in, their retirement years.
Services, "Financial Goals, Concerns and Actions of Women Business
/Web Site: http://www.harrisbank.com
IN: FIN MFD INS EDU
SU: SBS SCZ WOM ECO SVY
— CG67671 —
|Copyright:||(c) 2012 The Associated Press|