Most small-business owners pride themselves on having some kind of strategic plan when they start their business. Unfortunately, many entrepreneurs are so busy investing in their small business, they fail to put money aside to invest in themselves. A recent study by The American College revealed that 40 percent of small-business owners have no retirement savings. In fact, 75 percent of the people surveyed have no plan on how they will even fund their retirement.
Many small-business owners are depending on the sale of their company to be their nest egg. But as Tim Masset, regional president of BMO Harris Bank, says, “It’s important to have personal retirement savings outside of your business because the value of that business can fluctuate significantly over the years."
Every small-business owner needs to set up a retirement vehicle such as a SEP, 401(k) or IRA. The best savings for retirement are made on a monthly basis. These should be invested conservatively, since being a small-business owner is so risky. Talk to a financial advisor for a tax-friendly plan.
Read the full article in Black Enterprise.
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