Retirement Planning and Budgeting

Most small business owners don’t have the advantage of an HR department, so things like retirement planning are not on everyone’s radar. When you work for a large company, you have someone there who can make sure you sign up for a 401K and have advisors helping you. When it’s just you and a few employees you have to make the effort to get this done. And it’s an important thing to put on that to-do list.

Small business owners need to know realistically what they plan to do with the business when they are ready to give it up and retire. Do they plan to sell it and use those funds for retirement? Will the sale of the business be enough for them to live in retirement? If they plan to pass it down to children how will that work? Will the children buy the business, will it be a gift? How will that impact your retirement planning?

If you need retirement and investing help, do your homework. Get recommendations from others; check on how their fee structures work before you sign on the dotted line. But most importantly make sure you are the active planner in your retirement planning, otherwise you may be working long past retirement just to make ends meet.

Suzanne Cormier

Executive Director

BizWorks (Small Business Incubator)

Follow Suzanne Cormier on Facebook and

Twitter @BizWorksCenter
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Don’t Cash in Your 401K to Start That Business

I was teaching a while back and one of the students told us the story of his small business startup and failure.  When he retired he decided that he wanted to start a business. So instead of looking for financing he cashed in all of his 401K and sunk the money into the business. Within a year the business had failed. He was out of retirement money and out of work. In his seventies he had no choice but to go back to work.

This is a tough lesson to learn. We never advise people to cash in their whole life savings or retirement to start a business.  The chances of failure are too great and if you lose you could lose everything.  In addition there are many financial penalties for withdrawing all your 401 K too soon.

If you know you want to do something like start a business when you retire then start planning and saving for that business BEFORE you retire.  Educate yourself on running a small business while you are still employed. One of the biggest issues we see with small business owners is their lack of knowledge of actually running the business side of the business.   Save money to get that business going and build up your personal credit in case you have to borrow. But don’t cash in your 401K to start that business. You may just end up working all of your retirement years instead.

Suzanne Cormier

Executive Director

BizWorks (Small Business Incubator)

Follow Suzanne Cormier on Facebook and

Twitter @BizWorksCenter