PHOENIX - While being a small business owner comes with its fair share of perks like making your own hours and being your own boss, one of the downsides can be the lack of a company-sponsored 401K or retirement plan. When you've got to do the legwork yourself to save for the future, Desert Schools Federal Credit Union offers this advice:
Use a retirement calculator to get a rough estimate of how much you'll need. Free online calculators exist from Nerdwallet.com, Smartasset.com and even CNN Money online. Calculators like these factor in your current age, the age at which you wish to retire, your current income and inflation. Eventually, you'll likely want to speak to a certified financial planner to help with the heavy lifting, but these work for a good idea on where to start.
Investigate different savings plans. For small business owners, plans like the Simplified Employee Pension Plan (SEP IRA), Savings Incentive Match Plan for Employees (SIMPLE IRA), and Self-Employed 401K (Solo 401K) are the best to compare for your goals. Identify which is best for you by taking into consideration tax penalties, contribution limits and eligibility deadlines.
Be smart. Educate yourself on mastering your finances by attending bank seminars or looking for advice from the Small Business Administration. Free sources of information abound on business loans, advice on expansion and how to manage retirement goals. The more information you have, the more your business will benefit and your bottom line will be secure for retirement.
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