Retirement may be the last thing on your mind if you’re deep in the weeds of your home internet business.
For many online business owners, there is no line between your work-life and home-life so it’s understandable that retirement planning isn’t on your radar. But when you hear statistics about the cost of assisted living, it can be a wakeup call to anyone.
According to AARP, the cost of living for a private 1-bedroom in an assisted living facility in the Boston, Massachusetts area can cost as much as $48,000 per year. For other places around the United States, the cost is even higher.
This is why online business owners need to make sure their companies are financially sound for the long haul.
Paint the Picture of Retirement
Everyone’s idea of the ideal retirement picture is different and even though there is a great deal of advice that can apply to multiple visions, it’s important to remember that every business owner’s journey is different.
Honestly Assess Your Ability to Work
If your business isn’t very labor intensive, you may want to continue working on it in some capacity even into “retirement.”
But it’s easy for entrepreneurs to be shortsighted about what they’re going to be capable of doing as they grow older.
Something as simple and common as vision loss could prevent you from running the company the way you’ve grown used to.
Short-Term vs. Long-Term Savings Choices
If your online business doesn’t have employees beyond yourself, there’s also considerable freedom when it comes to the financial decisions you make.
In the article “You Don’t Want to Outlive Your Money … Or Do You?” Dr. Stanley Riggs discusses his own parent’s financial decisions going into retirement.
Riggs explains how his mother would make extremely frugal daily decisions only to have that money seemingly evaporate into thin air upon entering into a costly retirement home.
Online business owners need to decide IF they want to save for retirement or if they feel like the most financially-sound decisions are ones that benefit their business financially now, in the present.
How to Save Now
Whether you take the long-view or short, there are multiple ways that you can start saving money with your online business now.
Business owners can apply for a SIMPLE IRA plan which can allot money for themselves or their employees as retirement savings.
If you have loans that you’ve taken out to run or launch your company, you can also try to negotiate the terms of those loans in order to save money now.
Who Will “Inherit” Your Business?
The quotes are deliberate.
Oftentimes small business owners may assume that if they have children, those children will want to inherit the family business. But unless there’s been explicit conversation about this transfer, you shouldn’t just assume that your kids will be interested in taking over your company.
The more likely scenario is that going into retirement, it’s financially advantageous to sell your company or find a partner.
CNBC reported that in the first three months of 2013, the number of small business sales jumped 56% from the previous year and retirement was listed as the number one contributor to sale.
In order to properly plan for your business’s future, you’ll want to consider which of these options is best fit for you.
From figuring out your own personal retirement desires to considering who will take over your online business, there are a number of factors to consider when it comes to long-term financial planning.
By weighing out these options, entrepreneurs can make sure their business is on track now and down the road.
Photo credit: BigStockPhoto.com
About the Author: Kristin Livingstone writes on a variety of topics including online business, assisted living, and retirement.