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March 13, 2017
March 13, 2017
Owning your own small business is a popular notion in the United States. With more than 28 million small businesses in the U.S. representing over 50% of the working population in this country, it's perhaps safe to assume that it's a proven paradigm in our culture that will only continue to increase over time.
And while many small businesses have found their stride and are thriving, there are still a staggering number of Americans who aren't doing enough to secure their financial futures. According to the U.S. Census Bureau, the average savings of a 50-year-old is only $42,797. And over 80% of people between the ages of 30 and 54 don't believe they will have enough money put away for retirement.
As a small-business owner, you have a tremendous opportunity to not only turn a dream into a reality and create jobs for others, but you also have the ability to set yourself up for financial success. It's not enough just to be profitable. You also should be saving money toward your future.
Whether you're a small-business of one or of nearly 500 employees, here's how to leverage your small business for your financial success.
Put yourself first
Let's face it. As a small-business owner, you wind up putting your business first and oftentimes neglect your own best financial interests. You direct all your resources into getting your business up and running in the first place, and once you start to find momentum, saving for retirement may not be the highest priority on your ever-growing list of responsibilities.
Once your business is profitable, start paying yourself right away. Your small business can reward you with financial independence if you take action and start saving. Begin by saving 10% of your income, and then increase that amount over time. Ultimately, you want to be saving 15%-20% of your income into a retirement account. If you want to have enough in retirement, this is non-negotiable.
There are three different types of retirement accounts that work well for small businesses:
As a small-business owner, you have arguably more opportunities, not fewer, when it comes to securing your financial future. Most small businesses start with a SEP IRA and then graduate to other types of retirement accounts as their businesses grow and prosper.
Getting started as early as possible puts you as the business owner in the best position to reap the highest reward from following your dream: financial independence. Don't ignore your ability to secure your future. Instead, consider all the options you have available to you and start taking advantage of some of the tools that have been created with you in mind. What you do today will make all the difference in your tomorrow.
Leveraging your small business for financial success is something only you can do.
Paul Sydlansky, founder of Lake Road Advisors LLC, has worked in the financial services industry for over 17 years. Paul is a CERTIFIED FINANCIAL PLANNER™ and a member of the National Association of Personal Financial Advisors (NAPFA), the Financial Planning Association (FPA) and the XY Planning Network (XYPN).
Copyright 2017 The Kiplinger Washington Editors
This article was written by Founder, Lake Road Advisors, Llc, Paul V. Sydlansky and Cfp from Kiplinger and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to firstname.lastname@example.org.