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Five Critical Questions Small-Business Owners Must Ask Before Retirement

smallbusinessretirement

The number of small businesses in the United States has increased 49% since 1982, and the 23 million small businesses in America today account for 54%of all U.S. sales1.

If you’re a small business owner, you know it’s taken long hours and dedication to succeed. And when you retire you want to make sure you know exactly what will happen to your business. This means you need to have a strategy in place. According to a study from Guardian, 35% of SBO respondents are counting on the sale of their business to be financially prepared for retirement. The problem is that few – only 17% – have identified potential buyers for their business.2

As a  SBO, you can do more to prepare for your retirement. There are several questions you should ask yourself now to successfully prepare for your golden years.

  1. What is my vision for retirement?
    Take some time to thoroughly think about what you would like for your retirement years. How do you want to live, and what do you value most? This will impact the amount of retirement funds you’ll need to keep available. Many times small business owners fail to set aside funds in the beginning and find it near impossible to catch up in later years.
  2. When do I want to retire?
    Do you want to retire in five or 15 years? Determining when you want to retire will allow you to optimize your saving strategies.
  3. What will become of my business?
    Do you plan to sell the business or transition ownership to a family member? If you are a co-owner, will you sell your share of the company to the other owner? Do you want to stay involved in any capacity afterward? Who will help to ensure a seamless transition? Create a business succession plan and modify it as necessary as time passes.
  4. Which financial professional is my best ally for retirement planning?
    The right financial professional can provide expert insight to help you develop a comprehensive plan that addresses your needs and goals, particularly to help you build a retirement income strategy. Make sure this individual creates clear steps for how each goal can be achieved. Ultimately, think about what sources of guaranteed income are set up to cover your core expenses in retirement (such as health insurance, living expenses, etc.).
  5. Do I know how long my retirement will last?
    If you are successful in selling your business, then how do you make that “windfall” last throughout your retirement so you do not outlive your money? People are living longer, healthier lives, and retirement can be as long as 20 – 30 years. During retirement you’ll need an income plan that can last for an unknown time period.

Learn more at www.myretirementwalk.com.

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Kabbage Team

The Kabbage Team is here to not only fund the small business loans you need, but to help you grow your business through free marketing tips, webinars, tools and more. Is there something you'd like us to cover or want to get your small business featured on our blog? Send us a note at content@kabbage.com.

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