3 Reasons you should plan for retirement NOW
You may be familiar with the saying “The best time to plant
a tree was 20 years ago, the next best time is NOW.” If you started your
business thinking of it as your retirement ticket, make sure you have a contingency
plan. Starting your business does not guarantee an automatic retirement plan
for you. If your business is dependent upon your ability to perform, what
happens if you are unable to perform for a period of time? Does your business
continue to make money, depositing a percentage of that income into your
retirement fund? Absolutely not.
Developing a contingency plan doesn’t mean your business
fails, it simply means you have a plan for retirement – outside of selling your
business. If you have postponed thinking
about your retirement planning, here are 3 reasons you should not postpone it
any longer:
- -- You may
not be able to work forever, or may not be willing to: You started your
business because you were passionate about it. There is no guarantee that you
will find someone else that will duplicate that passion. You must be prepared
for that. Perhaps you have hopes for your children to one take over your
business, and they may very well be on board, but be prepared in case they are
not. In any case, you will not continue actively working your business forever,
so you do need to plan a proper exit strategy.
- -- Your
business may not sell for as much as you hope: It is common for business
owners to choose to sell their business at retirement. Because you have an
emotional connection to your business, chances are, you will always place a
higher value on it than it really is worth on paper. Be prepared for this when
you put your business on the market.
- -- Social
Security is not enough to live on, and medical expenses may increase: As
you get older, it is naïve to think that government benefits alone with cover
your life expenses. As time goes on, the social security budget continues to
shrink while inflation continues to go up, raising the cost of living and
medical expense. To enjoy a quality of life in retirement, you must have a plan
that includes more than just social security.
No matter how much you LOVE what you do, you probably won’t
to do it forever. Think of professions like a plumber, a baker, or a hair stylist;
despite your passion for your work, your body will just not allow you to work
this kind of professions into old age. As we age, the quality of service that
we can offer will eventually start to deteriorate. That’s why we retire.
My goal is not to scare you,
just to make you think. It’s your life, live it your way – just make sure that
it is the BEST way for you (and your loved ones).
