Entrepreneurs and Employees: Make Sure You Don’t Forget to Save for Retirement
Guest Post by Andrew Lisa
If you’re an entrepreneur, you’re focused on the here and now. Your startup business is your baby, and it needs all of your attention. You should know that one of the greatest risks about going into business for yourself is that you don’t have an employer-based retirement plan like a 401(k). It’s up to you and you alone to save for your retirement. It is equally important for employees to be up to date on the benefits as well.
Entrepreneurs have to build their own nest eggs.
How Much to Save
There is no set number that’s right for everyone when it comes to how much you should save. The only sure thing that applies to everyone is that the younger you start saving, the better. In the article “How Much Should You Save for Retirement? Financial Gurus Answer,” one financial expert recommends saving 15 percent of every paycheck. This is a good rule of thumb to follow.
Open an IRA
There are two types of Individual Retirement Accounts, or IRAs – traditional and Roth IRAs. Both are like 401(k)s in that they aren’t investment funds. They are just baskets that hold all of your investments. Like 401(k)s, they are designed to help you save for retirement. They both are sheltered from taxes, but they differ in when those tax benefits are realized and when you can withdraw your money. Talk to a financial advisor before you decide.
Retirement vs. Savings
Understand that a savings account is different from a retirement account. You can not touch the money in your IRA until you reach a certain age. The government allows contributions that are exempt from taxes, but only on the condition that it won’t be touched until retirement. Stiff penalties come with early withdrawal. Keep a second savings account for emergencies and anything else that might come up regarding your startup business.
IRAs are like 401(k)s that come from you, not your employer.
It’s great to be an entrepreneur – you’re in business for yourself! But you’re also responsible for yourself, and no one is going to save for you. Open an IRA. Have an emergency fund, and know that no matter how old you are, the best time to start saving is right now.
Andrew Lisa is a freelance personal finance writer. He covers retirement planning and investing.
Note: Being of the mindset to monitor savings, investments and your bottomline, will allow for peace of mind. Then you are prepared to have quality conversations while building relationships with your prospective clientele. This leads to the Smooth Sale!
Read Addtional Strategies and Techniques:
Nice Girls DO Get the Sale: Relationship Building That Gets Results, Sourcebooks
HIRED! How to Use Sales Techniques to Sell Yourself On Interviews, Career Press
