In between trying to grow your business and maintain a work-life balance, a retirement plan is probably one of the last thing you are thinking of right now. However, regardless your ultimate goal of becoming an entrepreneur, the best time to start planning for your retirement phase is now.
Still not convinced of why you need to start a retirement plan?
Think of a retirement plan as a safety net you can fall into at the end of your entrepreneurial journey. In other words, regardless what you intend to do with your business – to keep working forever, to sell it off, or to pass it down to the next generation – there is a quite a list of assumptions you need to get rid of. These include:
Selling a business is easy and the ultimate retirement plan
With all the hard work and sacrifice you have put into growing your business, it will be quite unfair to ask you not to think of your business as the ultimate retirement plan. But, the truth remains that your business is not the ultimate retirement plan.
Without complete control over a good number of economic factors, there is the tendency that you might end up overestimating the value of your business. What’s worse, regardless how profitable your business has been, selling it is not as easy as it seems in your head. Other than the massive paper work involved, you might not end up with a tidy pay that will tide you throughout the period of your retirement.
A retirement plan makes it difficult to invest in your business
There is no denying the fact that setting a large sum of money aside to fund your retirement plan can place a huge strain on your cash flow. However, you can’t deny the fact that compound interest and significant wealth compounding benefits are not very enticing.
To strike a balance, you can commit to saving a particular sum of money every month – knowing fully doing this limits quick access to this money. As your business grows and expand, you can you increase your retirement savings.
Feeling like you lost valuable time retirement saving-time?
Chin up already! Regardless where you are in your entrepreneurial journey, you can always take out a retirement plan. Once you are done reviewing your income, expenditure, and the various retirement plans on offer, you can then decide on how you want to fund your retirement plan.
You can either fund it by investing a percentage of your income, the dividends from stocks, interests on bonds, or the profits from investments.
Regardless what option you choose, just ensure that you follow through on your actionable plan and work hard at creating the retirement you have always dreamed of.
Here is a parting shot from Bat,ya Shevich, Warren Buffet
‘You know that retirement is coming. It isn’t as though it just shows up one day and takes you by surprise, so you need to get ready for it’.
Happy retirement ahead!