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June 13th, 2018 by

business owner retirement planning

Investing in your own business makes sense. Many businesses achieve significant growth each year. However, when you consider that many small businesses fold every year, it becomes clear that banking your retirement solely on the success of your business might not be the best idea. There is no guarantee that your business will continue to grow or even maintain its current value. If your business is worth less than you were counting on at the time you planned to retire, you could be forced to continue working or sell it for less than what you were expecting.

A business owner often assumes that their businesses will be their main source of retirement funds, but that strategy could be riskier than you think. For business owner retirement planning, it’s generally not wise to put all your eggs in one basket. Broadly diversifying your assets may help protect against risk.

Business Owner Retirement Planning Starts Early

Diversification involves dividing your assets among many types of investments. Putting all your money into a single investment is risky. You could lose everything if the investment performs poorly, even if that investment is your own business. Of course, diversification is a method used to help manage investment risk; it does not guarantee a profit or protect against the risk of investment loss.

Consider what would happen if you were to rely solely on the sale of your business to fund your retirement. What if the U.S. economy falls into a recession about the time you plan to retire? If a recession occurred when you planned to retire, it could affect the sale of your business or the income it generates for you.

Likewise, there is no assurance that a larger competitor won’t overtake your market, or that demand for your business’s goods and services won’t weaken because of new technology, rising energy prices, consumer trends, or other variables over which you have no control.

As a business owner, your business is almost certain to provide some of the money you need to retire. By building a portfolio outside of your business & considering the need for life insurance, you are helping to insulate your retirement from the risks and market conditions that can affect your business.

You may be good at business, but I’m a retirement expert.

As a business owner, don’t neglect your retirement planning. Let me show you how to get the most from what you have & create a dream retirement. Contact me for a FREE retirement strategy consultation at my office in Upper Marlboro, MD.
Contact me  1-833-313-7233.

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April 18th, 2017 by

life insurance for a business owner

If you own your own business, I bet you think about your vulnerabilities. If something happens to you, what will happen to your business? Who will take over when you are gone? How will your family afford to live without your income?  Business continuation is difficult enough under normal circumstances. However, if there is an unexpected death of a key person or business owner, complications increase exponentially.

Company-owned life insurance is one way to help protect a business from financial problems caused by the unexpected death of a key employee, partner, or co-owner. If the covered individual dies, the proceeds from this type of insurance can help in several ways. Here are some examples.

Fund a Buy-Sell Agreement

A buy-sell agreement typically specifies in advance what will happen if an owner or a key person leaves the company, either through a personal decision or because of death or disability. The death benefit from a company-owned life insurance contract can be used to purchase the decedent’s interest in the company from his or her heirs.

Keep the Business Going

If survivors decide to continue the business, they might need a break. This period when operations cease will give them a chance to develop a future plan. The death benefit can be used to help replace lost revenue. It can also pay costs associated with keeping the doors open, including rent, utilities, lease payments, and payroll. And, it may help the surviving owners avoid borrowing money or selling assets.

Replace Lost Income for Business Owner

If a business owner has family members that depends on their business income, the proceeds from company-owned life insurance could help replace the lost income. It would also protect the family’s quality of life while they adjust and move on.

The appropriate coverage amount will depend on several factors. It could be a multiple of the business owner annual salary or the company’s operating budget. Don’t forget to include details like the cost of hiring and training a successor and any debts that the family may have to repay.

You should have a thorough examination of a business and personnel before deciding on the exact amount of coverage you need.

The cost and availability of life insurance for a business owner depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving life insurance, it would be prudent to make sure that the individual is insurable. As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have contract limitations, fees, and charges, which can include mortality and expense charges. In addition, if a contract is surrendered prematurely, there may be surrender charges and income tax implications.

The loss of an owner can be devastating to a small business. A company-owned life insurance contract may help reduce the financial consequences if such a loss were to occur.

I want to give you “peace of mind”.

I can help you determine the right life insurance for your business needs.  Let’s meet for a FREE retirement strategy consultation at my office. Call 1-833-313-7233.

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