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.

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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.