Retirement Tips For Business Owners

Someone asked me to share some retirement tips for business owners specifically. Luckily, the retirement tips for business owners are kind of similar to retirement tips for individuals who don't have businesses, where the difference is the business owner's at an advantage, in my opinion, because you control your income or how fast you make it and what, you know, 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 to 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, uh, as if it's a secret. But 401s, IRAs, traditional versus Roth. Roth IRAs are pre-tax— sorry, 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. So I'm not going to tell you as a blanket thing, like, you should have those in your plan. You should have those if they make 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, because television shows make it really sexy on rental properties and flipping them. So a lot of people could do that. I have clients who have retired and they have rental properties and they're Income they make off that covers their retirement. There's annuities. There's— I mean, 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. And if you want an introduction to one, we have one who's right across the hallway from us in this building. He's my personal financial planner, and he's the smartest guy I've ever met when it comes to how money works and the numbers and everything. Uh, that's why I use them. So if you want an intro, let me know. Um, but ultimately it comes down to what your goals are, and once you know what the goals are, then you can back into it. Because quite frankly, maybe buying crypto plays a role in your retirement plan. Could be, I don't know. It depends on your goal. But ultimately 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. I don't— I wish I— it's hard to give specific tips if I don't know specific situations or scenarios. So hopefully that works. 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. I will give you a simple tip. Do something that makes it automatic. So if that's 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. Okay, so in order to free up cash from the business side, which then trickles down to be able to contribute to retirement, we do have a tool called the 13-week cash flow. Click the link in the description. It is the idea that if you forecast out things, you can kind of stay on top of what your cash is going to look like between now and a 13-week period. So it's a free tool, check it out. Remember, have the courage— profit is a choice. Have the courage and wisdom to choose it.