Small business owners need surplus cash after operating expenses to fund retirement. The video covers tax-advantaged accounts like IRAs and 401(k)s, then explains how automating contributions through the Profit First method makes saving consistent without thinking about it.
Some retirement tips for business owners. Luckily, the retirement tips for business owners are kind of similar to the retirement tips for individuals who don't have businesses. The difference is the business owner's at an advantage because you control your income or how fast you make it and the way you control your expenses, things like that. So ultimately, the overarching retirement tip is you have to have money left over from your living expenses. So first, you have to have money left over for your business expenses that pay you. And then what you pay yourself, you need to have money left over from your living expenses to be able to set that money aside. The money you set aside would go into theoretically something that builds towards your retirement. There are so many options out there of what you can do to save for retirement. Some people like the type of tax beneficial strategies that you hear about on everyone's blog, and they're trying to tell you it's the best thing since sliced bread. But for 401s, IRAs, traditional versus Roth. Roth IRAs are post-tax contributions, which means you pay tax on the money that goes in, but when you pull the money out, you don't. Traditional IRAs are, you get the tax deduction now, but when you pull the money out, you pay taxes. Of course, the government could change the rules on any of those at any point, but those are the common ones people talk about. And there's others, a SIMPLE plan, a SEP. What you choose kind of depends on your situation and more importantly, the goals that you're trying to accomplish. And you should have those if they matter. sense for you. There's even higher-level strategies that you could do depending on how much cash you have left over called a cash-defined benefit plan. That's kind of that side. But people like investing in real estate, for example. I have clients who have retired and they have rental properties and income they make off that covers their retirement. There's annuities. There's, there's so many financial products out there. Ultimately, the best retirement tip I can give you is you should talk to a financial planner. When it comes to how money works and the numbers and everything comes down to what your goals are. And once you know what the goals are, then you can back into it. The idea is you have money left over after your living expenses, and that money goes into something that you're comfortable with, that you understand, and that will result in the outcome that will allow you to retire when you want to retire. Those are called assets and they generate revenue of some sort. So in the light of that, though, again, I started with this. The business needs money left over after paying expenses so they can pay you. The Profit First system is a really great way to make sure that you can kind of get that stuff in place. And then with what you pay yourself from your owner's pay, stuff and distributions, you have money left over so that you can put money towards retirement. Do something that makes it automatic. Automatically take $100 out of my personal account every month or week or however frequency or whatever dollar amount and put it somewhere that is an asset that you're going to hold. That's a great strategy. Out of sight, out of mind. Automate it so you don't have to think about it. Little payments consistently. are much better than really large chunks of time in a sporadic setting. In order to free up cash from the business side, we do have a tool called the 13-Week Cash Flow. Click the link in the description. Is the idea that if you forecast out things, you can kind of stay on top of what your cash is gonna look like between now and a 13-week period. It's a free tool. Check it out. Thank you.
