If you own your own business, the thought of retirement might be just a fleeting one, and you may wonder if you will ever retire, whether that be because you are financially able or mentally willing. It is easy to be entrenched in the business and foresee yourself working well past the typical retirement age. Interestingly, family businesses make up approximately 90% of all businesses in America, yet, for those who own their own business, planning for succession and retirement may not be as high of a priority as you may think. An article from MarketWatch, “Can Self-Employed People Ever Actually Retire?”, offers some interesting insight regarding the self-employed retiring.
As MarketWatch points out, according to a Transamerica Center for Retirement Research report, 30% of the self-employed save for retirement from time to time and 15% never save. As you may be able to identify with, the reasoning behind this 45 % of self-employed Americans not consistently saving for retirement is that 68% of all self-employed workers expect to retire after 65 or don’t plan to retire at all. Additionally, MarketWatch highlights that 29% of self-employed workers prefer to not think about retirement until the time is much closer. The overarching logic behind all of this is that self-employed workers are generally confident that when it comes time to retire, they will be able to do so comfortably.
Catherine Collinson, CEO, and president of the nonprofit Transamerica Institute and Transamerica Center for Retirement Studies says this inspiring vision the self-employed have concerning retirement comes from the fact that “they have far greater freedom to continue working — or retire — on their own terms.” Yet, she goes on to say, “[this] doesn’t let them off the hook for saving and planning.” While you may love the flexibility as someone who is self-employed, thinking about retirement shouldn’t be a fleeting thought. Retirement can be a reality and customized to your preferences if you plan well in advance.
As a responsible business owner, you should have an estate plan, a succession plan, and a retirement plan, because while you may wish to work well into your golden years, you can never plan for the unexpected. If something were to happen to you, do you have a plan in place for your business? Is it saleable? Who will take over running it? Are they prepared or have you prepared long-term strategies? On the personal side, how will your family be taken care of financially? What about how will any medical expenses that could arise like long-term care or other high medical bills be covered?
While you may have an answer for these questions, the sad reality is, family businesses tend not to outlive their founders and people tend to under save and prepare for the costs of aging and retirement. Even though you may have a “stay-on-the-job longer” attitude and hold a positive retirement outlook, it is essential you create a business succession and retirement plan sooner than later and ensure these plans work with your estate plan. Since you can’t predict the life changes you will encounter through the years that can redefine your retirement plan or change your estate plan, you want your estate plan and by extension your retirement plan to always be up to date, so make sure you work with an experienced estate planning attorney who has an ongoing client care program.
Ultimately, if you’re self-employed you can retire and you can do so on your own terms, but only if you do the proper planning. At Family Estate Planning Law Group, one of our specialties is business succession planning. To learn more about our approach and about how our ongoing client care program is essential for business owners, visit our website and schedule your complimentary consultation today.
It is time to align your estate, retirement and your succession plans so you can take control of your retirement and be prepared for the unexpected.