Retirement Issues for Small Business Owner

1
Retirement Issues for Small Business Owner

• 1) Value of the Business
• Selling outright
• Liquidating
• Passing on to family
• Value/Net Worth of the business, many times, is
  the most valuable asset of the business owner

2
Retirement Planning

• Individual is responsible for retirement income
• Example
• Age 25, retire 60, live to 85, need 80-90 of
  income
• 2,000,000 goal
• Maximum social security benefit 1,742/month
• Saving goal
• 870/month, starting at age 25
• 2,103/month, starting at age 35
• 5,800/month, starting at age 45

3
Investing

• IRS provides many tax-deferred or tax-free
  investment accounts
• IRA Individual Retirement Account
• Deductible
• Non-deductible
• Roth
• SEP simplified employee plan
• Less than 25 employees, 15 of compensation,
  maximum 22,500/annually per person

4
Investing

• Other accounts
• KEOGH plan
• SEP IRA
• Simple IRA
• Individual must choose investment options
• Stocks
• Bonds
• Mutual Funds

5
Other Benefits

• Medical
• 5 deductible, prescription
• 690/month, 8,280 for family of 4
• Dental
• Preventative
• Restorative
• Disability Insurance
• 66 of 50,000, age 30
• 240/month, 2,880/annually

6
Other Benefits

• Life Insurance
• 500,000 face value, age 35, nonsmoker, good
  health
• Term insurance - 860/year
• Time Off
• Vacation, sick, personal time
• Average small business owner works 74 hours per
  week
• Takes 4 weekdays off