18 May 2022
Good day Luv,
When your employed friends talk about retirement, do you have a hard time relating? When you think about growing older, do you picture yourself happily still working? Well, as an entrepreneur, you’re not alone!
After spending years building businesses you’re passionate about, many entrepreneurs say they’ll never stop working. Or most of us see retirement as working less and having less stress. But because it’s difficult to hedge inflation, I always plan to have something that brings in cash.
In addition to the financial rational for continuing to work, some entrepreneurs believe their quality of life and health would be diminished if they stopped doing the work they love.
“Life is growth,” says Francois Gadenne, a serial entrepreneur and Executive Director, who says he plans to always stay productive.
“When growth stops, life withers away.”
But even if you plan to never completely stop working, a backup plan can be important. Most entrepreneurs don’t plan on retiring but when they reach a certain time in their lives, they want options…
The Retirement-Planning Conundrum
In some ways, planning and saving for retirement runs contrary to the typical characteristics of successful entrepreneurs. For instance, does planning for retirement make you a pessimist who assumes your business will never grow big enough to be sold for millions of dollars, making retirement savings irrelevant?
Does relying on a retirement nest egg mean you’ve lost the entrepreneurial confidence you once had?
It’s great if you’re that positive person who loves what you’re doing and can’t imagine ever not working, but still, there’s got to be a plan B, which is retirement savings!
You don’t know what’s going to happen. It might not be you; you might stay healthy but maybe the market changes and your business is no longer viable. The market doesn’t always cooperate with your dreams.
While staying busy late into your golden years may be ideal, experts say the wisest entrepreneurs will give themselves another option. There are those who want to work because they always have and they want the mental activity. And there are those who have to work because they didn’t set things up so that they could accumulate a large amount of cash to retire.
Planning That Works
Three-quarters of the entrepreneurs wait until they’re five or ten years away from retirement to begin planning for it aggressively.
In many cases, business owners are too busy with their businesses to think about retirement planning, or they spend years investing any extra money back into their businesses rather than into retirement funds. While an early start can yield greater returns, experts say it’s better to start saving late than to never save at all.
And because every entrepreneur and every business is different, the right plan for each situation varies.
Take the time to look at your options and choose the best one for you. You wouldn’t want to get caught off guard.
Til next time,