Small Business Owners: Are You Retirement Ready (or Not)?
Whether you are an employee in corporate America or a small business owner, retirement is a part of life. For many, the thought of retiring and whether or not you are ready to take those first steps might be overwhelming or intimidating. Ancient philosopher Lao Tzu once said, “The journey of a thousand miles begins with one step.” [i] Here is a 6 question checklist for small business owners to ask themselves to determine if they are ready for retirement.
- Are your debts paid off?
- Will you be able to pay your retirement expenses (both entertainment and bills) long-term without having to eventually depend on social security?
- Will the 4 percent rule be an approach that is feasible for you? (The 4 percent rule refers to being able to live off of 4 percent of your invested money in the first year of retirement, then increase or decrease the amount to account for inflation in subsequent years). [iii]
They were working to provide a comfortable life for their family and saving for retirement. That is why writing out attainable goals, making checklists, and regularly referring to them are important skills to cultivate, especially for retirees. Figure out what your new purpose will be after you retire. Write it down in a notebook and revise these plans periodically. These ideas don’t just entail financial plans and objectives, but lifestyle goals, and hobbies that you may be interested in pursuing but never had time before.
- Determine the market value of your business?
- Identify succession candidates.
- Communicate your succession intentions with employees.
- Periodically review and revise your plans as you see fit.
- Stay up-to-date on tax planning and evolving tax laws. [v]
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This article was prepared by LPL Marketing Solutions
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