Retirement Tips for Business Owners

Apr 1, 2021Business, Business Consulting

As a business owner, it is easy to imagine how the company you have built can play an essential role in financing your retirement. But do you have a strategy to make the most out of your money? It is easy to put your financial plans on the back burner for the sake of growing the business. But it is important to have a retirement strategy that takes advantage of tax-saving opportunities that save for the future.


There are several retirement plans available to business owners, each with its requirements and restrictions. Here are three popular retirement account options:

  1. SIMPLE IRA Plan. SIMPLE IRAs are available to companies with 100 or fewer workers. These plans are individually managed by employees and are funded by both the employee and employer.
  2. SEP IRA Plan. SEP plans provide business owners with a simplified method of contributing toward employees’ retirement and saving for their retirement. SEPs are easy to maintain, there are no setup fees, and can be used by companies with any number of employees. These plans are entirely employer-funded, and employees make no contributions.
  3. 401(k) Plan. In general, 401(k) plans can provide more options and flexibility than other types of retirement plans. It allows employees to contribute a portion of their wages toward their retirement savings. It also allows, but does not require, employers to make contributions for each eligible employee. 401(k) plans are available to companies of all sizes.

The right retirement plan allows you to maximize your retirement savings while also benefiting your business and employees. To choose the right retirement plan, you need to weigh various factors, one of the most important being the goal(s) for the plan.

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  • A retirement plan only helps your retirement savings IF you choose to contribute to it. We recommend deciding how much you want to set aside to fund your retirement at the beginning of each month.
  • As a business owner, you have many responsibilities – budgeting, marketing, selling, and countless other tasks. It is easy to forget about retirement planning. To keep retirement contributions top-of-mind, record these as a separate line item on the company’s income statement.
  • With the COVID-19 pandemic and all of the changes it brought to the business environment, it is more important than ever to keep up with your tax planning. We recommend reviewing your tax plan at least every 12 months to see how to maximize each year’s retirement contributions. Click here to read our blog post: 5 Retirement Plan Changes in 2020.


Your future can be more secure with the help of a Smith Schafer advisor. We can help you select and implement the plan that is most appropriate for your business. We base our recommendations on your business’s unique characteristics, such as the owner’s retirement goals, how the company is set up, the number of employees, etc. We can also help you understand the legal, compliance, and tax advantages related to each type of plan. Contact our retirement experts at [email protected] to schedule a free consultation today!


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