As a Small Business Owner, How Should I Prepare for Retirement?

The Temptation for Small Business Owners is to Hold Off on Saving for Retirement.

The assumption is that next year will be better than this one.  Saving for retirement too frequently ends up being postponed.

Start Saving Today 

You should be trying to save at a minimum of 10% of your annual income.  If you can, you should strive to set 20% aside for retirement. 

Create Leverage for Yourself

You can save on taxes and other expenses by establishing yourself as a business. Popular business structures for small business owners include LLC, S-Corp, and Sole-Proprietorship.  As a business owner, you should establish a budget and a savings plan for your business.  The benefits of establishing a business, budget, and savings plan include:     

Creates more options for retirement savings and tax deductions 
Developing a budget and following it helps you to become financially secure

Establishing an LLC or S-Corp enables you to separate and protect your personal finances

Creating a separation between your work and personal life helps you to disentangle when you retire

What Investment Vehicle Should I Choose?

The challenge is knowing what investment vehicle you should use to invest your money – so you get the best return on investment.  

Self-Directed IRA:  Self-directed IRAs allow you to have more control over your investment options. You can set up a self-directed IRA as a traditional IRA (to which you make tax-deductible contributions) or a Roth IRA (from which you take tax-free distributions). 

Life Insurance:  Universal insurance or whole life using Infinite Banking system, might be part of a robust retirement plan. They offer investment options that help you save for retirement – without having to pay any taxes in the future.  You can also collateralize and leverage your policy to turn your expenses into capital.  In other words, you can borrow against your policy (at lower rates than your policy returns) each month to pay for expenses and make money in the process. 

Traditional IRA: You can make pre-tax contributions of up to $5,500 per year. In other words, the taxes are deferred. If you’re over the age of 50, you can make catch-up contributions as well.

Roth IRA: Roth IRA’s allow you to deposit savings post-tax. In other words, you pay taxes now, so you don’t have to pass taxes on the money later. You can contribute up to $5,500 per year to a Roth IRA.

Solo 401K: A solo 401k retirement plan enables you to contribute up to $61,000 per year. If you experience financial difficulties, you can take a loan against 50% of your retirement savings. 

Simple IRA: A SIMPLE IRA allows you to offer you and your employees a retirement plan.

We’re Here to Help

We know that choosing a retirement plan that works for you depends on a significant number of factors. Our team at Rising Business Solutions is well-versed in helping small business owners choose what type of retirement plan or plans will ensure a stress-free financial future.  We can also help you to set yourself up as a business. 

You can schedule a free consultation by clicking here.  You can also call 833-747-4641 or email Sean Tull (certified financial educator) at to schedule an appointment.   

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