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Retirement Planning > Retirement Investing

Survey of Top 5 Retirement Hazards1.Outliving income and assets2.Death of a spouse3.Inflation4.Interest rate risk5.Stock market riskSource: Society of Actuaries, Post-Retirement Risk Chart, 2003.Securing the owners retirement will depend on his or her ability to realize maximum value upon sale to a third party. The type of business will indicate which option will work best. [Chart 1 and call-out]

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[Chart 2]

“Thumbnail” Estimate of Business Owner’s Retirement Need

1.Choose desired annual retirement income.

2.From that amount, deduct Social Security ($10,000 if single/$15,000 if married)

3.Next, deduct annual pension payment (ignore 401K and IRAs)

4.Multiply the net amount X 14 to find the total savings needed.

Source: Business Digest, January 29, 2004.

[Chart 3 and call-out]

More on this topic

To enjoy those tax deductions, federal law makes you follow certain rules about including employees, limiting contributions for higher paid owners and restricting

Factors affecting the selection of a Qualified Plan

?Number of years until retirement

?Age owner expects to retire

?Number of employees and expected cost

?Successor management identified

?Cash flow and administrative costs.