Not long ago, a typical retiree enjoyed a pension benefit provided by their employer, a guaranteed income stream for as long as the retiree (and the spouse) lived. It was entirely employer-funded, a sort of a reward in exchange for a job well-done and loyalty. Some employers were generous enough to even subsidize all or most of health benefits during retirement.
If you're a business owner, your company is probably the most valuable asset you own. As such, growing and protecting the value of your business, and eventually monetizing such value, is enormously consequential to achieving your financial independence.
At its core, retirement planning is simple. You trade income during your working years for income during your non-working years. To do this, you set aside a portion of today's income and accumulate enough so you can live off of it in retirement.
When small business owners want to step away from their business and retire, many may worry about the tax burden they’ll face from all their potential gains. Our professional colleague, Steve Parrish, Co-Director of the American College Center for Retirement Income, graciously gave us permission to post his article in Forbes that describes a tool called a deferred sales trust that may help to spread out gains over time and lower their tax burden.
It's fair to say that until recently, T (and their advisors) were singularly focused on saving for retirement. Lately, however, the focus has shifted largely to how to make money last through retirement—a move from accumulation to decumulation.
If you had a $2,000,000 nest egg, would it be enough to last through your retirement years?
The answer can depend on... when you retire.
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