{"id":2343,"date":"2019-10-08T00:00:00","date_gmt":"2019-10-08T00:00:00","guid":{"rendered":"https:\/\/www.insightfolios.com\/2019\/10\/08\/retirement-planning-for-business-owners\/"},"modified":"2020-09-03T15:43:59","modified_gmt":"2020-09-03T15:43:59","slug":"retirement-planning-for-business-owners","status":"publish","type":"post","link":"https:\/\/insightfolios.com\/2019\/10\/08\/retirement-planning-for-business-owners\/","title":{"rendered":"Retirement Planning for Business Owners"},"content":{"rendered":"

Business owners are particularly vulnerable to some misconceptions and false assumptions about their retirement. Let\u2019s address a few of these issues\u2026<\/em><\/p>\n

1) If I execute my business plan, my retirement plan will be taken care of as well.<\/h4>\n

It\u2019s easy to fall into this assumption when you\u2019re putting your heart and soul (as well as your money) into your business. The idea is that you will create enough value in your business that it will fund your retirement later. But that\u2019s some pretty vague thinking; and if a specific plan is not in place, chances are good, that idea just won\u2019t work. It\u2019s wise to establish retirement accounts and fund them consistently instead of relying too heavily on the business itself. Have a plan B in place just in case plan A doesn\u2019t work. It is better to be over prepared than under prepared.<\/p>\n

2) I don\u2019t necessarily have a lot of money in the bank, but when you factor in the value of the business, my net worth is really high.<\/h4>\n

Most business owners are disappointed to find out that their business is worth less than they think it is. The amount that a potential buyer might be willing to pay for your business is based on a multitude of factors and prices (i.e. value) can change all the time. Many owners also fail to factor in their own daily contributions to the business. If they\u2019re no longer running the business, that means that a potential investor who doesn\u2019t want to run the business themselves would have to hire someone to run it, which affects the bottom line and ultimately the value. The point here is don\u2019t rely on someday down the road your business may be worth a lot at the time of retirement.<\/p>\n

3) When I sell the business, I\u2019ll make more than enough to support myself in retirement.<\/h4>\n

Some business owners believe they can just sell the business when they are ready to retire. But what happens if selling the business outright is just not possible? If it\u2019s not, you might have to consider some sort of owner-financing option. In this case you would need to consider whether the business can generate enough cash flow to support you when you are not personally running the operation. Remember you won\u2019t have a lump sum of cash to work with if you cannot sell outright.<\/p>\n

The key here is not to rely on the sale of your business being an easy transaction or one which will support you fully in retirement.<\/p>\n

4) My family is going to take over the business, so I know they will take care of me in my retirement.<\/h4>\n

In theory, relying on your family running your business may make sense. Reality may not prove that theory to be reliable. Family business transitions sometimes go beautifully for everyone involved. Other times, assumptions are made by one or both sides of the transaction and things don\u2019t turn out as successfully as planned. New owners do not always agree on the direction of the company. Sometimes emotions just plain get in the way. Despite the phrase, \u201cit\u2019s just business\u201d, it\u2019s never \u201cjust\u201d business in a family run business. To the contrary, everything is personal.<\/p>\n

Even if a business is staying in the family and you think that everybody is on the same page with how things will work, it\u2019s still important to have everything officially documented in writing and vital that you have a solid plan for how your retirement income will be generated.<\/p>\n

If you have any questions, please reach out to us and we will be happy to sit down with you and start the planning process. Please visit our website www.insightfolios.com<\/a> for more great information.<\/p>\n","protected":false},"excerpt":{"rendered":"

Business owners are particularly vulnerable to some misconceptions and false assumptions about their retirement. This article aims to address a few of these issues.<\/p>\n","protected":false},"author":6,"featured_media":2344,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[1262,1266,1257,1258],"tags":[372,21,368,373,22,202,13,179],"yoast_head":"\nRetirement Planning for Business Owners - Insight Folios<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/insightfolios.com\/2019\/10\/08\/retirement-planning-for-business-owners\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Retirement Planning for Business Owners - Insight Folios\" \/>\n<meta property=\"og:description\" content=\"Business owners are particularly vulnerable to some misconceptions and false assumptions about their retirement. 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