Ryonet | #PoweringThePrint
If you’re like me, you love your job… but you don’t want to do it forever, right? There’s going to come a day, we’ll call “D-Day,” when you are “Done” and you finally put down the squeegee. As a fellow screen printer, I understand what it’s like to put everything you earn back into your business, especially when you’re just getting started. And we’re not alone. 32% of small business owners aged 45 to 64 have less than $100K saved for retirement, according to a recent survey. Take a moment to process the “to 64” part of that statement. That’s a year away from the age at which most people retire!
Why? I guess because not only do most small business operators try to operate on cash to minimize debt, but also because there’s a hope that eventually you can pass your business on (and reap a share of the profits) or sell it for a nice sum. It’s not hard to see what the issues are with this “eggs in one basket” approach though. What if the business fails or you’re forced into early retirement. Alternatively, what if it never sells?
None of us wants to think like that, but we have to. Even under the best circumstances, saving for retirement is still important. Your post-retirement income may need to stretch 20-30 years! No matter how much, you have to know that you CAN put money away now, even it’s just 10% of your income. And, if you have employees, you CAN provide them with retirement options that deliver long-term security while creating mutual tax benefits. Retirement plan contributions aren’t just tax-deductible, they can also help you attract and retain great employees!
There are four main options you can consider when evaluating retirement plans:
When considering retirement plan providers, look at more than price. You know better than anyone that time is money. Find a provider that will handle all the admin work, eliminating headaches and risk. Ask about the educational tools they offer to help keep you and your employees on track. Double-check that they’re not taking kickbacks from mutual fund companies that might influence their recommendations. And find a partner that’s willing to come out in person to meet with you and your employees and answer questions, building the relationship and trust.
Finally, start now!! Every year makes an exponential difference in the long-term growth of your savings. If you were to invest the max into an IRA starting at the age of 22 vs. 29, your difference in your initial investment would only be $35K, but its final value would be worth roughly $528K more! That’s a lot of margaritas on the beach somewhere! If you just save $.02 for every shirt you spend, and you print somewhere around 2,000 shirts per month. That’s all you need to plan for a comfortable retirement!
Hungry for more information? Check out Part 4 of our new educational series, “Running At Full Speed – Building Your Own Screen Printing Business.”