Small business owners often have a more difficult time when it comes to business accounting for retirement planning. In many circumstances, the vast majority of their net worth is tied up in their business. Plus, many small business owners opt to reinvest profits in their business rather than add to their personal savings. It’s no wonder that 39% of small business owners aren’t confident they can retire before age 65. Follow this advice to get your savings on track.

Retirement Advice for Small Business Owners

1. Don’t Put All Your Eggs in One Basket

Even if your small business is thriving today, don’t rely on its eventual sale as your only path to a successful retirement. Industries evolve, times change, and companies can suddenly struggle ⁠— business accounting for retirement planning is about being prepared for all outcomes. Gather savings and investments outside of your small business.

2. Open a Retirement Account for Savings

Many types of retirement accounts are available to owners of small businesses, including SIMPLE IRA, SEP IRA, and Solo 401(k). Research which is appropriate for your situation; the correct choice depends on variables like income and number of employees. Use the account to save money and invest while possibly lowering your tax burden.

3. Write Down Your Plan

Small business owners know all about strategizing and figuring out how to be successful. Use those skills when it comes to retirement planning. Put your plan on paper and stick to it. Ideas to include are a savings minimum for each month or year, the age at which you wish to retire, and the total amount of money you want to have saved up.

4. Create an Exit Strategy

If you plan to pass your business to the next generation or sell the business at some point, put those plans in writing. Whether that means hiring a business accounting professional to put a value on the company or sussing out potential buyers, it’s never too early to get the ball rolling. The last thing you want is to reach retirement age without an exit strategy.

5. Get a Professional on Your Side

A retirement planning professional can help you organize such arrangements, especially for those whose retirement is complicated by small business ownership. An expert can help you run the numbers and aid in diversifying your retirement plan.

If you’re looking for help with retirement planning, contact the experts at Gillette & Associates, LLC, in La Crosse, WI. For over 20 years, they have been serving the business community throughout the Coulee Region. This accounting firm offers several financial services, including professional bookkeeping, business accounting, tax return preparation, and retirement and estate planning. Call (608) 784-8355 to schedule a consultation, or visit their website to learn more about their services.