Importance of Retirement Plans for Small Business Owners

SBA, Retirement Planning, Illinois Small Business AttorneyWhen you start a small business there are many benefits, not the least of which is the fact that you get to be your own boss. While the work is hard and often thankless, in the end you are able to build something of your very own. The thing that can be tough to remember though, is that while there are so many benefits to embarking on the adventure of starting your own business, there are also additional responsibilities. While if you worked for someone else you may earn a pension or be able to save for retirement through a fairly painless payroll deduction plan like a 401(k), saving for retirement is not as simple when you are your own boss and are putting all of your money into making your business a success. It can be easy to forget to save for retirement, but we can remind you of the importance of doing so.

Many Small Business Owners Not Saving for Retirement

USA Today reports that Baby Boomers are starting as many as 50 percent of new businesses in the United States. According to the U.S. Small Business Administration, more than five million Americans over the age of 55 either own their own business or are self-employed. This is extraordinary! The problem, as shown by an American Express Survey from 2013, is that 60 percent of small business owners are not saving the money they need for retirement and 73 percent are worried about how they will maintain their lifestyles when they do retire. This lack of savings can come from the drive to continually reinvest in one’s business. Unfortunately, in the long term it may hurt the business when it has to be sold or dismantled in order for one to survive his or her retirement years.

Retirement Planning is Key to Estate Planning for Small Business Owners

Without a strong retirement plan, estate planning can become futile for a small business owner. Many business people start their business with the hopes that someone in the family will carry it on after they are gone, while others anticipate that their family will ultimately sell their business. Either way, unless you are willing to forego retirement and fortunate to remain healthy enough to work for your entire life, you will have to consider how you will pay your own expenses during retirement and still have something to pass on to your heirs if that is a priority for you. If you have retirement savings, you can comfortably pass your business along when the time comes, but if you do not, you may have to spend your entire estate to get through your golden years.

Call Gierach Law Firm

If you are a business owner considering your retirement plans or estate planning, you should contact the experienced Illinois small business lawyers at Gierach Law Firm. Call us today at (630)756-1160.