10 Helpful Tips to Heat Up Your Retirement This Summer

The days are growing longer and hotter, the sounds of children playing can be heard outside, and the warm air smells of flowers and freshly cut grass. As the summertime heats up, it is the perfect time to re-evaluate your retirement and heat up your plans. Retirement planning is an integral part of managing your business and financial future, but it can be easy to forget to maintain your plan.

Your retirement may be a time to kick back and relax, or you may have grand plans to pursue new hobbies, write the great American novel, or travel the world. Whatever your goals for retirement may be, maximizing your retirement funds is something everyone can enjoy.

As a small business owner, you probably already have a retirement plan in place — but spending some time this summer to ignite your plans can help ensure your retirement is on fire!

Read on to learn ten tips to heat up your retirement, then contact the experts at NASE for more help.

Heat up Your Retirement This Summer
As the temperature rises this summer, make sure your retirement income rises right along with the mercury! Try some of these ten tips to make your retirement swelter:

1.   Plot your retirement needs with your family: This is a key first step. Perhaps you have already had conversations with your family about your retirement plan and business succession plan. But if you have not yet talked with them, this is a great time to start. You may have more time together this summer relaxing at home or on vacation to discuss your plans and theirs. Making sure everyone is on the same page can avoid confusion and frustration later. You can discuss your goals and achieve them through smart retirement planning and share the role your family plays in your plans.

2.   Meet with your financial advisor: Your advisor is your partner and your best resource when discussing your retirement plans. If you have not met with your financial advisor in a while, now is a good time to schedule an appointment or Zoom call. If you do not have an advisor yet, check out NASE for help finding a professional. Be sure to come to your appointment prepared to discuss your retirement goals and current situation. Bring your questions and ask your advisor to clarify things you do not understand. You may want to set up a follow-up appointment to ask more questions or review your plan in the future. Being proactive is a best practice when it comes to your retirement.

3.   Move funds to higher-yield accounts: Some retirement funds may perform better than others, and you may wish to change funds or investment blends to see a higher rate of return. This can be risky, so make sure you talk to your financial advisor or other experts to understand the risk and reward. Finding the right mix of financial products and investment portfolios for your needs can be challenging, but higher-yield accounts can pay off in the future if you have the risk tolerance for it.

Some examples of 401(k) and other savings and investment plans you may consider are: 

  • SEP IRA — A Simplified Employee Pension plan, or SEP-IRA, can be an uncomplicated choice for a small business owner due to its ease of purchase and high contribution limits. 
  • One-Participant IRA — A one-participant or solo IRA is another option for small business owners planning for their retirement needs. 
  • SIMPLE IRA — A SIMPLE IRA stands for Savings Incentive Match Plan for Employees and is an option for small businesses with less than 100 employees or is a sole proprietorship. 
  • Roth IRA — A common retirement choice, the Roth IRA is a good personal option to enhance your retirement plan as a small business owner. 
  • Traditional IRA — You may be able to open a traditional IRA as part of your retirement savings plan. 

4.   Diversity is best: As a savvy business owner, you already know the diversity of thought, leadership, risk management, and supplier can all benefit your business. The same is true for your retirement strategy — in other words, do not put all your eggs in one basket. Spreading your investments and savings into various funds can maximize your returns, minimize your risks, and ensure your retirement plan is viable.

5.   Increase your business’ value: Part of your retirement plan may be to sell your business. If this is the case, you want to get as much as possible for your assets when the time comes to sell. Increasing the value of your business to make it the most attractive sale is a best practice. This may include cleaning up the physical property, hiring an accountant to put your books in order, or documenting your business practices and processes into standard operating procedures. Slower summer months are a great time for this housecleaning investment in your business’ value.

6.   Start planning earlier than you think you need to: Maybe you have just recently started your business or have suffered from losses or slowdowns in 2020 — that can make it hard to focus on retirement planning, but you cannot start too early. If your business is in its infancy, that may be the best time to begin planning for the future. From structuring your business and investments to make it easier to sell in the future to fund an IRA or investment account right away, the planning you do at the beginning of your business can pay off in the future. If your business is already established, now is the time to plan for the future — starting to heat up your retirement now can pay great dividends when you want to retire.

7.   Look at programs geared toward small businesses: Small businesses are special and have many defining characteristics that make them different from large corporations and individuals. Your needs deserve programs geared towards them. NASE can help you find professionals and other resources and programs designed for small businesses — hearing directly from the small business experts can help to heat up your retirement planning by focusing on your specific needs and strengths. There are newer 401(k) plans meant for smaller businesses — these plans may be more attractive than a more generic 401(k).

8.   Focus your efforts: It is summertime, and your plans may be pulling you away from your business to spend time outside with your family, play sports with friends, or take a long-anticipated holiday. Your time is even more limited when the nice weather beckons, so take advantage of quick updates and training opportunities like the NASE Minute Videos — hot takes from industry leaders on all sorts of small business-related topics like heating up your retirement.

9.   Talk to your friends: Your fellow business owners and friends in your neighborhood and network are a great resource as you heat up your retirement plan. People are starting to venture out more and have socially distanced gatherings when it is safe to do so. If you do decide to meet with your friends and colleagues, ask them about their retirement planning. They may have some great ideas and resources you did not know about — sharing information is second nature to small business owners, and you will likely find your network happy to help.

10. Spend time succession-planning: If you have employees, you may want to talk with them about your succession plans. If the business is successful and has a long-term employee, they may be interested in buying you out when it comes to your retirement. Knowing this in advance and crafting your retirement plan around this succession plan could be a smart move. You can work with your attorney to draw up paperwork to protect you and your potential buyer and work with your employee to learn the management side of the business before you retire. Even if you do not have employees, you might have a child or family member who would be interested in succeeding you in your business. That is another discussion you can have this summer when you gather with your family.

A Bonus Tip
One bonus tip is to dream big and plan bigger — just like when you created your business plan, it is essential to have lofty goals and set plans for how you will reach your goals. Allowing yourself to have big dreams lets you envision what is possible, and setting milestones to reach along the way turns your dreams into achievable goals. Let yourself dream and make plans to reach those dreams.

Final Thoughts
Summertime is a great time of year to heat up your retirement. When the pace of life slows down, and you have a little more time to think, focusing on your retirement plan is a smart business move. This summer, take the time to review your goals, meet with your financial advisor, and follow some of the tips described in this article. If you do that, you are sure to heat up your retirement!

How Do I Learn More?
To learn more about retirement planning for small business owners, contact the experts at the National Association for the Self-Employed. Our licensed professionals will be happy to answer any questions you have.

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