This is a sponsored post for SheSpeaks/Prudential. All stories are my own.
Planning for retirement as a business owner takes a little more effort since you don’t have the support of an employer that is helping you invest in a 401K. As someone that has been self-employed for over 11 years, planning for a secure financial future is not only imperative but is fully my responsibility to prepare for. After meeting with a Prudential Financial Professional I put together these steps on how to plan for retirement.
Create a Budget
If you missed my previous post I shared the top questions to ask a Prudential Financial Professional and items to bring to your first meeting. As mentioned in that post, the goal of your initial meeting with a financial professional is to get to know one another and create an action plan. Creating a budget is important when setting realistic goals for the future.
By creating a budget for your current financial situation, you can also start to draft an outline for the future. Questions to ask yourself:
- How much money do I need to retire?
- What is the average that I spend annually on my current lifestyle?
- How much debt do I need to pay off before retirement?
As an entrepreneur, the line between your finances for business and personal money may get blurred. Paying taxes as a sole proprietor does not mean you always keep everything separate. When I first left corporate to run my own business I mixed my business income in my personal checking account and spent what I wanted. There was not a clear distinction between the two.
By setting up a payment schedule for yourself, you will get a better idea of what is left over for business expenses and savings. My Prudential Financial Professional, China Jackson, recommends setting up direct deposits for paying yourself and paying towards your retirement. This way it is automatic each month and the remaining money in your business account can be invested back into the business or go towards paying off debt.
Find Ways to Save
Once you have created an accurate budget with your Prudential Financial Professional, you can start to look for ways to cut expenses and save. Do you drink your coffee from a local shop each morning? Try drinking it at home. Do you love to travel as much as my family? We will not give up our adventures, however, we can take more road-trips and local getaways over larger trips if we need to save more that year.
Finding ways to save money towards retirement does not have to be a daunting task. It also does not mean you have to give up the lifestyle you love, you just need to make adjustments. Your financial professional can help you find the areas in your budget that can be improved on. You may want to consolidate a debt or cut the cord on cable, by writing out your budget you will get a clear vision.
Make Smart Investments
By meeting with a Prudential Financial Professional you can explore ways to invest your money towards retirement. It is recommended that you trust a professional to help you so you make smart investments instead of jumping in headfirst. They also recommend that you check your investment accounts once a quarter and not make rash decisions. Your investments may go up and down, which is normal. By watching the retirement investments daily, you may panic and take out your money before you should. By working with a professional, they are educated and trained on monitoring investments.
Even if you do not believe you have one spare penny to invest or save right now, take time to meet with a Prudential Financial Professional for a free consultation to see your options. There is no obligation to continue your partnership with them. Some weeks you may feel like you only have the amount of a cup of coffee to put towards your retirement and that is okay. Even a dollar a week counts. Then by next month, increase to two dollars a week.
“Goals are dreams we convert to plans and take action to fulfill.” ~ Zig Ziglar