Business owners must follow the steps for retirement planning and get ready for this stage of life. By
planning for the future ahead of time, the business owners avoid sudden surprises, and they will have
enough money to retire comfortably. By setting up the right plans, the business owner can save money
for retirement and maintain the same lifestyle they are accustomed to. Their first step is to review all plans
available for the self-employed and owners of smaller-scale companies.
Financial planning services help business owners create a solid plan for the future. Business owners can
compare and contrast all retirement services and determine how much they can save before retirement. A
retirement planner provides detailed information about each plan and how much the business owner can
contribute each year to the plans. By setting up more than one retirement plan, the business owner could
maximize their savings and get the most out of their retirement savings opportunities.
Creating an IRA
An entrepreneur who is self-employed won’t have access to an employer-based retirement plan. They
can set up an individual retirement account to generate savings for their retirement. If the business owner
is under the age of 50, they can contribute up to $6,000 into their IRA.
If they are at least 50, they can contribute at least $7,000. Another option is a Roth IRA which uses after
tax dollars for your contributions and can protect the owner from higher future tax rates. They will pay
taxes on the income before contributing it to the Roth IRA. When they are ready to withdraw money
during retirement, the business owner will not have to pay any additional taxes.
A SEP IRA Plan
With retirement planning, self-employed individuals or business owners can set up a SEP IRA. Most
business owners can contribute up to $57,000 or 25% of their annual profits. When contributing to the
plans, the account holders cannot contribute more than $285,000 into the account. This type of plan
offers a lot of flexibility.
In a SEP, the business owner must pay their self-employment taxes before contributing to the plans.
Unlike other plans, they do not have access to catch-up contributions if they are 50 or older.
Solo 401(k) Retirement Plans
The retirement plans allow business owners to contribute a maximum of $57,000 each year into the Solo
401(k) plan when considering the employee contributions and employer matching contributions. If they
are older than 50, the plans allow for a catch u p contribution of an additional $6,000 to the plan beyond
It is a great option for a business owner who is self-employed or has employees. If they have employees,
the business owner may have additional considerations for their retirement plan because they will have to
navigate additional stipulations about employee participants. When owning a business, the owner must
consider what plans give them the most benefits for their retirement.
Will They Shut Down the Business?
When planning for their retirement, the business owner must determine if they will shut down their
business, sell it, or hand the reins over to a family member. If they are planning to shut down the
business, the owner must have a plan to settle their debts.
They must have contingencies for selling their equipment and the commercial property, too. There will be
tax implications related to proceeds from any sales of business assets, and the business owner must
manage these taxes within the year they shut down their business.
If they plan to transfer ownership of the business, the owner must have a plan for protecting their workers
and ensuring a smooth transition. The plan must define how everything is managed before the business
owner stops working altogether.
Where to Get Help With Retirement Plans
Walker Capital Preservation Group provides a full catalog of retirement planning options for business
owners. The service provider can provide details about all plans, how they work, and how the business
owner contributes to the plans. The company has an extended history of exceptional services, and they
can provide small business owners with expert information about saving for retirement. A small business
owner can set up an appointment with the company to find out more about these plans.
Business owners must plan ahead for retirement and find plans that give them optimal savings
opportunities. The plans must allow for maximum contributions and give the business owners better
control over their tax implications when they withdraw the money.
A retirement planner gives business owners expert insights about retirement plans and how to maximize
their savings. They can provide business owners with details about unique plans available to business
owners who do not have a normal cash flow trajectory like we see from many W-2 employees. With the
right plan, the business owner can get the most out of their plans and continue to live their preferred
lifestyle after they retire.