You’re young. You’re young and the proud owner of a small business. You’re young and not thinking about retirement. On average, Americans retire at age 65. 65 is still decades away; you’re not worried about having a retirement plan or what’ll become of your business. You’re leading your business now, and you’ll lead it then.
Unfortunately, it’s not quite so easy as all that. Formulating a small business plan and investing in a hearty business insurance policy is only one aspect of running a small business. If you don’t offer any retirement options, either for your staff or yourself, you’re going to run into trouble sooner than you’d think. After comparing business insurance quotes online with CoverHound, you need to start looking at your retirement options. Sure, you’re only 30-something now, but before you know it, you’ll be sailing into your golden years.
The Crux of Preparing for Retirement
As found in an American Express survey in 2013, 60 percent of small business owners were not putting money away for retirement. With social security checks shrinking and legislation cracking down on budget spending, your retirement savings could be all that is available to you in 40 years’ time. Without a 401(k), you could be spending your senior years destitute and without any worldly comforts. Is that how you want to spend your golden years after decades of hard work?
According to Time Magazine, 1 in 3 Americans have not saved any money for their retirement. “There are plenty of obstacles Americans claim are in their way when it comes to saving for retirement," Life + Money columnist Cameron Huddleston says. “Although all of these things can put a strain on our budgets, they don’t necessarily make it impossible to save for retirement."
Ask yourself this: What plans do you have for your small business after you have hit your twilight years? Do you plan to run your business until you take your last breath? Would you like to hand over the business to the next generation, guaranteeing your descendants a job for years to come?
Whatever it is you would like to do, you still need a 401(k) in place so that whatever should arise, you are financially covered.
For those unfamiliar with what a 401(k) is, here’s a quick definition:
“A 401(k) is a retirement savings plan sponsored by an employer. It lets workers save and invest a piece of their paycheck before taxes are taken out. Taxes aren’t paid until the money is withdrawn from the account."
If your small business offers 401(k) plans, you will keep your employees longer and will have a financial cushion to fall back on once you are of age to retire. But, to reap the benefits of a retirement plan, you need to get a retirement plan.
U.S. News and World Report writes that many small business owners forego retirement plans because they don’t know where to start: start with a 401(k). Now you have no excuse—because you know exactly what you need.
There are three things every business needs, a budget plan, business insurance and retirement plan. Find your free small business insurance quote with CoverHound.