You might be thinking about retiring, but how do you know when you are really ready for it, mentally and financially? For decades, the normal retirement age was 65. This was when you became eligible for Social Security and Medicare. But things are different today.
Answer these five questions to find out how, when and if you should retire:
When you retire, those you hang out with while working may disappear from your life. This isn’t a good or bad thing, it just is. When you’re off the radar screen of others, they often forget to call. Before long that forgetfulness becomes an embarrassment.
When that happens, it’s just easier to let you fall away. Will you make the effort to try new activities where you can meet others, and plan activities to maintain your existing relationships?
Do you know how much you need for living expenses when you retire? Where does your monthly retirement income come from? Is it enough? If you’re concerned about whether you can afford to retire, you might also want to think about work in retirement, probably a part-time job that matches your interest.
There’s a very good chance you have 25 or 30 years of life ahead of you. You might not be able to work when you are older and less healthy. That means you need savings to help you get through those years. Do you have an emergency plan? Do you have the money to pay for huge medical bills and health-care expenses?
Before taking the leap, make sure you don’t have seller’s remorse – when you get rid of something, you want it again. Spend some time thinking about whether retirement is right for you. Are you interested in continuing to work at a job you love? Is it possible for you to arrange your work so that almost everything you do is a lot of fun? If you work for yourself you can do that too.
Many people retire only to find that they’re bored. You might want to think about what you always wanted to do but either couldn’t afford it, or didn’t have the time.
Many believe that once we reach our adult years, we have at least three careers in us. The first is a learning career. The second is when you get to apply what you learned. The third career is something that you want to do just for fun. Do you have your just-for-fun ideas lined up?
Whether closing a sale, haggling over a price with a supplier, or discussing a raise with an employee, business owners negotiate nearly every day. While you may already be an effective negotiator, consider the following strategies to help maximize your negotiating skills.
Negotiating does not have to be a zero-sum game. When two parties enter into negotiations, they are both looking to create something of value that did not exist before. Instead of taking an adversarial approach, think about how both parties can arrive at a mutually beneficial solution. Without abandoning your own interests and objectives, consider the interests of your negotiating partner. Reflect on what your priorities might be if you were in your partner’s shoes and how you can best accommodate those priorities.
Before approaching the bargaining table to negotiate an important deal, make sure you are fully prepared. If, for example, you are attempting to sell a product at a certain price, have evidence on hand to justify your price, such as information or testimonials about the quality of the product relative to similar products in the marketplace and about the prices of equivalent products offered by competitors. If necessary, practice with a business partner or coworker, asking for feedback and advice on how you can improve your arguments and presentation.
Find out as much as you can in advance about your negotiating partner so that you can explain in detail why what you are offering is ideally suited to meet his or her specific needs. It may be tempting to focus solely on the virtues of your company or product, but many clients will see through a one-size-fits-all sales pitch. In the course of your presentation, concentrate at least as much on your client’s needs as on the product or service offered. Your client will know if you have done your homework.
When you are the customer, come to the negotiating table with your questions about the offer as well as information about the prices for similar products or services available elsewhere. Have in mind an ideal price and how much you would be willing or able to deviate from that price if, for example, you were offered a volume discount, a maintenance contract, or free delivery.
As you approach the negotiating table, be sure to keep an open mind. Listen carefully to what your negotiating partner has to say, and think about whether you can offer a greater degree of flexibility than you initially anticipated. If necessary, ask for additional time to think about the terms before entering into an agreement.
The deal you are negotiating may be a big one. So be aware of any hidden agendas, and do not allow yourself to be pressured into signing a contract you do not fully understand. If you are attempting to close a sale, do not insist that a client make an immediate decision if he or she is not ready to do so. While pitching aggressively to get the sale may be effective in the short term, it may jeopardize your relationship with the client, and may damage your reputation for solid business practices.
Inevitably, some negotiations come to an abrupt halt when neither side is willing to compromise further. However, this may not be the end of the story. Even if you are unable to strike a deal, avoid showing any anger or irritation. Psychologically prepare yourself for the possibility that the initial round of negotiations may not go your way, and envision yourself gracefully accepting a negative outcome. Kindly and professionally, let your negotiating partner know how much you appreciate the time he or she has taken to discuss the transaction, leaving the door open for future communication. Even a session that ends in a deadlock can be useful in building a relationship that could result in future cooperation.
Negotiations with other business professionals can be tricky. But if you are prepared before you come to the table and remain open about the outcome, you can improve your negotiating skills and your chances of building your business.
The COVID-19 pandemic brought about a significant shift in the way we work. Many organizations were forced to quickly adopt remote work arrangements to ensure business continuity during the crisis. While some organizations were already familiar with remote work, many others had to adapt to a new way of working.
Now, as the world begins to emerge from the pandemic, there is a growing interest in hybrid work, which combines remote work with in-office work. And while there are plenty of advantage of hybrid work, there are just as many challenges too.
To reap the benefits of hybrid work, organizations need to invest in communication tools, technology infrastructure, and establish clear guidelines and expectations. With the right strategies and support, hybrid work can be a win-win for organizations and employees alike.
Innovation. Perseverance. Accomplishment. Every business owner committed to success starts with an idea, works hard to make it happen, and believes in the potential for great things.
As an entrepreneur, you must manage your business for growth, as well as your personal wealth for accumulation and preservation. Building your financial freedom, while growing your business, is a process that begins in a business’s infancy and continues throughout its maturity. Depending on the stage of your business, you will have different needs and priorities. For example, startups often must raise capital or secure financing, while owners of more established businesses may be focused on developing exit strategies and funding retirement.
Let’s take a look at some important considerations and opportunities at the various life stages of your business.
While most young companies are born on a wave of energy and enthusiasm, it is challenging to survive infancy. Financially, this phase is usually the most difficult. Oftentimes, startup entrepreneurs funnel their personal savings into the company and use their assets as collateral for loans. All this may be at stake, and the business may not be generating profits. But this is the risk business owners take on their quest for success. Like most of the challenging phases we experience on the road to maturity, this too shall pass—more easily with a solid business plan.
An important complement to your business plan is a fine-tuned marketing strategy. In order to promote your company and generate business, you must make your product or services known. Then, when the money comes in, cash flow management becomes crucial. Even profitable businesses may flounder if they fail to have cash on hand to meet their financial obligations. If you need more incentive, know that wise cash flow management may help you attract potential lenders and investors. Success in these areas will help you achieve a measure of stability and get on track for the next phase: growth.
With a growing client base, steady income, and profitability at hand, the potentially successful business owner faces various decisions. Should you offer new products and services? What role should investors play in the company? Do you need to hire more staff? What benefits are best for attracting and retaining valuable employees? All of these questions have answers, but the most appropriate solutions for your business will depend on your unique situation.
During the formative years, it’s important to keep an eye on your personal financial future when reinvesting in your business. One area of concern is asset protection. Businesses often start out as sole proprietorships or partnerships, but it may be in your best interest from both a tax and liability perspective to consider structuring your business as an S corporation or a limited liability company (LLC).
In the early stages, employee benefits can be a significant cost burden, but they play an important role in your company’s success and your own financial security. In addition to providing you with the resources you need personally, attractive benefit plans will help you attract and retain qualified employees.
Qualified retirement plans offer tax-advantaged opportunities for both your business and participating employees. There are many options, including Simplified Employee Pensions (SEPs) and Savings Incentive Match Plans for Employees (SIMPLEs), which are relatively cost effective and easy to administer. More flexible plans that allow you to save more annually are 401(k)s (with variations including Safe Harbor and Solo 401(k)s), profit sharing plans, and defined benefit plans. To enhance benefits for key employees, you may want to consider nonqualified plans such as deferred compensation or executive bonus plans, which can help you selectively reward and retain your best and brightest.
As you accumulate wealth, protecting your earnings and lifestyle is paramount. Planning for life’s uncertainties with proper insurance coverage may help minimize your risk of loss. Life insurance offers financial protection for your family after your death, and disability income insurance replaces a portion of your income should you experience a qualifying injury or illness and be unable to work for a period of time. You may also wish to consider long-term care insurance, which can help pay for medical expenses should the need arise. In all three areas, group coverage is available for your employees.
If you have key employees or business partners, weigh the benefits of key person life insurance and key person disability income insurance to protect your business. To cover business expenses such as salary or benefit costs if you or a partner experiences a disability, consider business overhead expense insurance.
As your business matures, it may be time to shift your focus from wealth accumulation to wealth preservation. Two areas of focus are key: business succession and estate planning. With the appropriate strategies, you can minimize estate taxes and maximize the amount passed to your heirs.
A well-developed succession plan can help you smoothly transfer or sell your company. If you wish to keep ownership and control of your business within your family, assess the interest and qualifications of potential parties and develop a transition strategy. If you plan on selling your business, it is important to properly valuate your business and prepare for the sale. A buy-sell agreement can formally prearrange a buyer for your business and stipulate the price that buyer will pay. The deal may be funded with a life insurance policy to ensure that cash will be available to purchase the business when necessary, should you die unexpectedly.
At every developmental stage, professional guidance can help you survive the growing pains and make the most of your opportunities. For more information, be sure to consult your legal, tax, and financial professionals.
Building and sustaining a business is not a task for the faint of heart. As anyone who has launched a business from the ground up knows, transforming an idea into a successful enterprise requires not only technical know-how, but also a steadfast willingness to work hard and weather the setbacks that inevitably come with establishing a new business in a competitive marketplace.
But when the going gets really tough, how do you maintain your energy and optimism? While most of us are born with some ability to cope with adversity, resilience is also a skill that can be learned and cultivated.
By considering in advance how you would recover from an adverse change in circumstances, you can prepare yourself to bounce back quickly from even the most challenging situations.
While there are some practical steps you can take to protect yourself from potential setbacks, such as having sufficient insurance and savings, problems may arise for which no protection is available, such as an abrupt downturn in the market or the unexpected loss of a major client or key employee. By approaching these unanticipated setbacks with the right attitude, you may be able to address the problem more competently and more quickly.
Keep in mind that resilience does not necessarily mean going it alone. By building your personal and professional networks, you ensure that you have trusted allies who can provide encouragement and advice when problems arise. While friends and family members can be an invaluable source of support in a crisis, they may not understand all the issues you face in your business.
By joining industry organizations and getting to know other people working in your field, you create a support network of professionals you can consult when weighing how best to handle specific problems related to your business. An experienced mentor can also provide insight and encouragement.
However, just talking about problems does not resolve them. You must be prepared to take whatever action is necessary to meet the challenges ahead.
Start by making a detailed list of possible ways to address a problem, and then assess pros and cons of each. If, for example, market conditions have changed, revisit your business plan and adjust your goals to the new environment.
Rather than becoming discouraged because you are unable to meet your original goals, set your sights on hitting new targets. Don’t be afraid to consider unconventional strategies, such as partnering or bartering with other businesses, or branching out into a seemingly unrelated business area.
Simply by doing what you can each day to improve your situation, you may find that you are gaining positive momentum that can help propel you forward, despite obstacles.
If current circumstances cannot be easily changed, strive to accept the situation. Some problems, such as a downturn in your particular market, could remedy themselves with time. If work is slow, consider taking breaks to travel, get outside, or spend time with family or friends. Catch up on sleep, get more exercise, improve your diet, or clean out your closets at home.
Focusing on your overall well-being – and getting some distance from the business-related issues you have been focusing on so intensely – can generate a much-needed shift in perspective and provide new insights into solving some seemingly insurmountable problems.
Whatever your difficulties, do not overlook the assets you have acquired. Take the time to appreciate the strengths within your organization. Even if you have downsized your workforce in response to the economy, remind your remaining employees how the company can continue to be competitive, despite the challenges in the marketplace. If you demonstrate a steadfast willingness to work hard and weather the inevitable ups and downs with energy, optimism, and resilience, your staff may also do the same.
Together, you can work toward the success of the business.
The cost of a college education may be daunting for many people and/or families. If you are fortunate enough to have sufficient time to save, your road to paying for a higher education for your children will be a lot less difficult. Choosing between a public or private institution can also make a big difference in how much you will need to save. If you qualify, financial aid may also be a factor.
So. . . today’s the day you’ve decided to implement a comprehensive savings program geared toward paying future college tuition. Here are some valuable options for help in accumulating the necessary amount of money:
It’s never too early to begin your child’s college funding plan. As time goes by, you will need to re-evaluate whether you are using the appropriate savings vehicles, and whether or not you will have a funding shortfall. If you can anticipate your savings will fall short of covering your child’s entire college bill, you will be in a better position to thoroughly explore and potentially take advantage of alternative funding options. However, keep in mind, like other types of financial planning, your child’s college funding plan requires a disciplined approach that emphasizes consistency with your overall goals and objectives.
*There is no guarantee that the plan will grow to cover college expenses. In addition, depending upon the laws of your home state or designated beneficiary, favorable state tax treatment or other benefits offered by such home state for investing in 529 college savings plans may be available only if you invest in the home state's 529 college savings plan. Any state-based benefit offered with respect to a particular 529 college savings plan should be one of many appropriately weighted factors to be considered in making an investment decision. You should consult with your financial, tax or other adviser to learn more about how state-based benefits (including any limitations) would apply to your specific circumstances and also may wish to contact your home state or any other 529 college savings plan to learn more about the features, benefits and limitations of that state's 529 college savings plan. You may also go to www.collegesavings.org for more information.
Investment advice is offered through Integrated Partners, a registered investment adviser doing business as Strong Valley Wealth & Pension. This information on the website has not been approved or verified by the United State Securities and Exchange Commission or by any state securities authority. Registration as an Investment Adviser does not imply a certain level of skill or training. Strong Valley Wealth & Pension, LLC offers securities through M.S. Howells & Co. Member FINRA/SIPC. M.S. Howells is not affiliated with Strong Valley Wealth & Pension. Not all products and services referenced on this site are available in every state and through every representative or advisor. Check the background of the firm or investment professional on BROKER CHECK or ADVISER CHECK.
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