Every business owner has to make an exit at some point. Some owners leave on their own terms, either through retirement or with the sale of the company. Others, though, exit before they’re ready via disability, health issues or even death. While it may not be pleasant to think about the latter category of exits, it’s important to consider what may happen to your business and your family if you pass away.
Estate planning can sometimes be a complicated process, but it can be even more complex if you are a business owner. You have to consider how to compensate your family for your years of investment and hard work. You also may have business partners to think about. And you probably want to create a smooth transition for your employees, customers and other interested parties.
Not sure whether you have enough life insurance protection? According to a recent Bankrate Money Pulse survey, there’s a good chance your coverage amount could be insufficient. The survey found that nearly 40 percent of all American adults don’t have life insurance. Among those who do have policies, almost half don’t have enough.1
There are many reasons why people carry less insurance than they need. Insufficient coverage could lead to financial difficulties for your dependents and loved ones if you unexpectedly pass away.
What do you dream about when you think of retirement? Travel? Pursuing a new passion? Spending time with family? Retirement is the time to live life on your terms and spend your time doing what you love the most.
Unfortunately, there could be some roadblocks standing in the way of your dream retirement. Many of those roadblocks may stem directly from your planning decisions. Retirement is a major financial goal, and there are a number of planning mistakes that could leave you unprepared to fund your desired lifestyle.
It used to be that retirees could depend on guaranteed lifetime income from Social Security and an employer pension to fund their golden years. While today’s retirees still enjoy Social Security income, very few have access to a pension. In 1998 nearly 60 percent of Fortune 500 companies offered a pension. As of 2015 fewer than 20 percent offer one.1
However, there are still some employers that offer pensions to their employees. Pensions are also known as defined-benefit plans. The 401(k) may be the new standard when it comes to retirement benefits, but the defined-benefit plan hasn’t gone totally extinct yet.
Worried that you’re not prepared for retirement? You’re not alone. According to a 2017 study by Gallup, 54 percent of Americans are concerned that they won’t have enough money for retirement. In fact, retirement was the top financial worry among Americans, ranking just ahead of medical bills.1
There are a number of issues that can limit your ability to save for retirement. Living expenses and child care costs may force you to cut back on your saving efforts. Emergency costs and health care bills could be an issue. You might suffer a job loss that disrupts your earnings.
What comes to mind when you think about retirement? Is it travel, a favorite hobby, or spending time with family? Retirement should be about the good things in life. After all, you’ve worked hard for decades to accumulate assets. Retirement is the time to enjoy the fruits of your labor.
Of course, saving money and getting to retirement is only half the battle. After you leave the working world, you will still face risks that could threaten your financial stability. Without a risk management plan in place, you may be unable to enjoy a comfortable retirement.