BizNet OnLine Magazine, Mr. Money Know' s

Mr. Money - Know' s
By: Dana Goldfarb
Financial Writer
dana@biznetonline.com

Do you ever think about retirement? Aaahh, retirement ........traveling, pursuing hobbies, moving out of town, being broke. Broke? Yeah, being broke because you didn’t give enough thought to how you were going to pay for all of those things you wanted to do. Let’s face it, when you retire you are going to need a lot of money saved up. In fact, you are going to need approximately 60 - 80% of your pre-retirement income to just keep up your current lifestyle when you’re in retirement.

Now, to get to your successful retirement you are going to need to put investments into a savings account. Part of this account will be funded from your after-tax income (paycheck, profits from business), and part will come from your retirement plan....if you have one. Whether you are a sole proprietor or you are a business owner with employees, you can have one. It’s a very efficient way to work toward your goal. But maybe you’ve thought about starting one but haven’t because you are totally confused about what kind of plan to set up. Believe me, that’s a valid reason because the Feds don’t make it easy to figure out. But letting this worry keep you on the sidelines means missing several advantages such as tax deductions, a systematic way to build your nest egg, and the chance to attract and retain quality employees.

If, on the other hand, you already have a retirement plan in place, it’s likely that the business you run today is different from the one you first started. You may have experienced changes in size, personnel, or cash flow. It’s necessary that your retirement plan adapt to these changes. And besides keeping pace with your business, your retirement plan should be flexible enough to adjust to regulatory changes, also. The Feds love to tinker with the mechanics of plans, like changing contribution limits, or adding and eliminating different types of retirement plans. In other words, just because you have a plan doesn’t mean that it’s still the right one. Have it reviewed.

Considering the time and effort you devote to your business, you deserve to reap the rewards of a comfortable retirement. Over the coming months I will be bringing you more information on the various plans that are available to you, the small business person. It may be a bit overwhelming and confusing, but believe me, it’s worth knowing. So stay tuned!

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