Why You Still Need Goal-Based Planning in Retirement

by Sergio Mariaca on Mar 15, 2018 11:39:48 AM |Share:

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rawpixel-com-255078.jpgBefore you retired, you may have spent time developing strategies to help you reach your retirement goals. You might have invested for the income you would need, minimized your debt, or protected yourself with long-term-care insurance. By focusing on your financial goals and envisioning the lifestyle you wanted for that next stage in life, you were able to build a path toward retirement.

Now that you are retired, you are no longer setting long-range goals because you’ve likely reached your destination, right? Not quite.

Each stage in life requires new goals and strategies, and retirement is no different. Here are some reasons why goal-based planning can still help you build the life you enjoy, even in retirement.

Your New Reality May Not Be What You Expected

The Employee Benefit Research Institute found that fewer than half of retirees say that their retirement is very enjoyable, no matter their economic status or gender.[1]

As you prepared for this phase of life, you may have envisioned your dreams of a leisurely lifestyle coming true. But as reality set in, you found the life you once imagined is not what you are experiencing. If this is true for you, you can still make the most of your retirement by acknowledging how you’re feeling, and identifying the necessary steps to revamp your perspective and experiences.

Ask Yourself these Questions:

  • What exactly do I feel unhappy about? And what am I able to change?
  • What have I been unable to achieve so far? And what are the roadblocks?
  • What lifestyle changes can I make? What can I change now to make my life different?

You May Need New Lifestyle Goals

The average retiree in America will spend 18 years in retirement.[2] Before you retired, you had to focus on the goals that would help you retire comfortably; now you may need to look at how you want to spend your time.

If you have reached retirement and found yourself feeling disappointed or disillusioned, you can make changes.[3] You can start revamping your lifestyle by identifying ways to enhance your enjoyment and deepen your engagement in the long term.

Ask Yourself these Questions:

  • Are there any new hobbies I would like to pursue?
  • What volunteer opportunities could increase my community involvement?
  • Should I get a part-time job, and what new skills can I develop to support my search?

Ultimately, every stage in life brings new experiences and fresh priorities. Just because you spent years working to ensure you could afford retirement doesn’t necessarily mean that the planning and preparation stops once you retire. Of course, your unique financial situation and life values will drive how goal-based planning can help you in retirement.

If you’d like to explore how to strengthen your goals and better ensure you live your best retirement life, feel free to contact us.




5 Mistakes Business Owners Make

by Sergio Mariaca on Jun 14, 2017 2:45:09 PM |Share:

retirement small business business business owners biz life insurance


Small-business owners are an essential component of keeping America’s economy churning. In the United States, small businesses with 500 or fewer employees make up 99.7% of companies and are collectively worth more than $10 trillion.1

Too often, however, small-business owners spend so much time and energy building their companies, they neglect their personal financial futures. They might consider their companies to be their retirement plans, but don’t create the structure or strategy necessary for turning financial success into a meaningful retirement.

Mistake No. 1: Not Creating a Retirement Road Map

Building, running, and growing a company is tough. Business owners have countless responsibilities, and too few hours in the day. Often, in the midst of fulfilling your professional priorities, you end up putting your personal financial life on the back burner.

If you have not planned for your retirement, you are not alone. Many entrepreneurs think growing a business is all they need to retire. However, simply having a business does not automatically mean you have a retirement strategy in place. Without a documented road map—one that goes beyond the hope to sell your business or to pass it to family—you could end up pushing back your ability to retire. In one survey, 28% of respondents said they would delay retirement if they could not sell their businesses or receive the money they needed.3

Delaying retirement is not always an option, though. Life often brings surprises and challenges, and you cannot always control when you retire. In 2016, 55% of people who retired early did so because of challenges, such as health problems or disability.4 To help ensure you can experience retirement on your terms—rather than reacting to what life or the business world throws your way—you need to proactively address these items…today.

What to do now:

  • Define your ideal retirement. Clarify when you want to retire and what lifestyle you hope to enjoy.
  • Build strategies to address your retirement. Determine the actions you need to take to fill the gaps between your current assets and the income you will need to support your desired retirement.
  • Hold yourself accountable. Do not let the busy life of business ownership keep you from staying on track toward the retirement you desire.


Mistake No. 2: Not Having an Exit Strategy                                     

For many business owners, the idea of selling their companies for top dollar or passing them down to future generations is a retirement dream. Many entrepreneurs, though, are not doing the work necessary to turn this dream into a reality.

In the United States, 60% of small-business owners are baby boomers who plan to retire in 10 to 15 years. However, only 1 in 8 has a business succession plan—regardless of the company’s success.6 In fact, a survey of business owners with more than $3 million of investable assets found that 64% of respondents ages 50 and older did not have a formal succession plan.7

No matter how long you want to work and how much you love your business, a clear exit strategy is necessary to help foster the company’s longevity and preserve your financial health. If you want to be able to retire when and how you would like—and have your business last beyond your career—you need an exit strategy for accomplishing that goal.

What to do now:

  • Define your ideal exit strategy. Do you want to sell your business? Pass it to the next generation? Find an outside successor?
  • Determine the real value of your business. Hire a qualified professional to provide a clear valuation of your company as it is today. Depending on how far you are from retirement or exiting, you might need to revisit this valuation in the future.
  • Create a strategy—and stick to it. Your exit strategy might require you to hire new people, adjust your services, or implement a number of other changes.


Mistake No. 3: Not Having Separate Retirement Savings

Trying to build retirement savings while you foster your business can be challenging. With only so many dollars to go around, and an endless list of professional expenses, you might rather reinvest in your company. However, even if you are ready to sell your business at retirement, you need to have savings that are completely separate from your business.

The reality is that solely relying on the value of your business to carry you into retirement is a risky approach that can easily backfire. Not only can industries change and companies falter, but only 20% of businesses listed to sell actually do.9 Would you and your family be able to enjoy a comfortable retirement without your current income or profits from selling your business? If the answer is no, now is the time to start building your savings.

What to do now:

  • Balance your personal and professional finances. When deciding how to invest your available assets or what salary to draw, make sure you focus on addressing both sides of your financial life.
  • Explore available retirement-savings tools. From SEP IRAs to 401(k)s and beyond, small-business owners have access to a variety of vehicles for building retirement savings.
  • Review your budget, and create a disciplined savings approach. Identify ways you might be able to trim your current expenses or save on your tax liabilities. Also, establish a habit of regularly contributing to your personal retirement savings.


Mistake No. 4: Not Having Sufficient Life Insurance Coverage  

Most people are familiar with life insurance, but the role this product plays for small-business owners often is more complex than for the typical individual. Of course, sufficient life insurance can help protect your family’s financial security if you were to pass away. A business owner, though, could have an extra liability: business collateral. If you take out loans to support your business and you pass away, your family members are on the hook for that debt, which could jeopardize their financial standing. However, with the protection of life insurance, your loved ones are covered.11

In addition, life insurance can be a tool for supporting your company’s longevity.12 Luckily, the coverage you need might cost significantly less than you expect because people often overestimate the cost of life insurance. In fact, the median guess for the cost of $250,000 term life insurance was more than twice the actual price.13

*Guaranteed interest rates are based on the claims-paying ability of the underlying insurance company. Additional benefits and riders may increase the cost of the premium or reduce the interest rate earned. Applicants are subject to underwriting, which may include medical history and current health.

What to do now:

  • Analyze your current life insurance coverage. Do you have the right tools? Do you have unrecognized gaps?
  • Address your family’s life insurance needs. Calculate your total debts and expenses to find the amount your family would need if you were to pass away prematurely.
  • Uncover your business life insurance opportunities. Work with a professional to determine how life insurance might be able to help support both your business needs and your retirement goals.


Mistake No. 5: Not Hiring Outside Support

Running a successful small business requires a number of skills—from delivering your product or service to managing employees and growth. Accustomed to shouldering a vast number of responsibilities, many business owners seem to forget they do not have to go it alone.

Hiring outside help not only gives you access to experienced professionals who can apply their expertise to your specific needs, but it can also save you significant time. In a 2016 survey of almost 1,700 growth-oriented small businesses, almost 60% expressed challenges with understanding and managing laws and government regulations.15 They spent an average of 4 hours a week just dealing with regulation and tax compliance.16

So, business owners have both personal and professional financial strategy needs on top of regulatory and tax burdens, thus increasing their need for professional support. Unfortunately, 36% of entrepreneurs seek advice from the Internet instead.17

What to do now:

  • Determine what professional support you need. You likely should consider hiring a tax professional, attorney, and financial representative. Your unique circumstances might require additional support.
  • Ask your professionals to work together. Aligning your financial life requires an understanding of its many facets. Make sure your support team has a clear picture of how your various
    pieces intertwine.
  • Embrace the benefit of outside expertise. Your financial representative and other professionals are there to help support your needs with professional guidance. Let them provide the insight you need and take the weight off your shoulders.

Launching and growing a small business is a challenging, time-consuming endeavor that is not for the faint of heart. In times of economic fluctuations and changing regulations, we believe it is critical to seek guidance from a financial representative. The tips in this report are a helpful overview of what you might need to address for your own retirement, but your complete answers are as unique as you are. From our experience, small-business owners who recognize and avoid these common mistakes—and take proactive steps to plan for the future—are better able to enjoy the lives they desire.


Footnotes, disclosures, and sources:

Opinions, estimates, forecasts, and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice.

This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.

Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

Opinions expressed are not intended as investment advice or to predict future performance.

Past performance does not guarantee future results.

Consult your financial professional before making any investment decision.

Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.

These are the views of Platinum Advisor Marketing Strategies, LLC, and not necessarily those of the named representative or named broker/dealer, and they should not be construed as investment advice.

[1]“17 Small Business Statistics You Need to Be Well Aware Of.” Fundera Ledger. [Accessed Feb. 24, 2017]

“Business Owner’s Retirement Planning.” ESOP Plus. [Accessed Feb. 24, 2017]

2“New Survey Finds Small Business Owners Uncertain about Retirement Plan, Finances.” TD Bank. [Accessed Feb. 24, 2017]

3“5 Retirement Planning Tips for Small Business Owners.” Forbes. [Accessed Feb. 24, 2017]

4“The 2016 Retirement Confidence Survey: Worker Confidence Stable, Retiree Confidence Continues to Increase.” Employee Benefit Research Institute. [Accessed Feb. 24, 2017]

5“Business Owner’s Retirement Planning.” ESOP Plus. [Accessed Feb. 24, 2017]

6“Business Owner’s Retirement Planning.” ESOP Plus. [Accessed Feb. 24, 2017]

7“If You Do This, You're Smarter Than Most Millionaires.” [Accessed Feb. 24, 2017]

8“5 Retirement Planning Tips for Small Business Owners.” Forbes. [Accessed Feb. 24, 2017]

9“Industry Statistics Every Buyer Should Know.” BizBuySell. [Accessed Feb. 24, 2017]

10“A Guide to Life Insurance for Small Business.” Sun Life Financial. [Accessed Feb. 24, 2017]

11“Why Small Business Owners Need Life Insurance.” PolicyGenius. [Accessed Feb. 24, 2017]

12Pence, Ralph. “Six Ways Business Owners May Utilize Life Insurance.” LinkedIn. [Accessed Feb. 24, 2017]

13Hawks, Curtis. “Use These Stats during Life Insurance Awareness Month.” LinkedIn. [Accessed Feb. 24, 2017]

14“New Survey Finds Small Business Owners Uncertain about Retirement Plan, Finances.” TD Bank. [Accessed Feb. 24, 2017]

15“The State of Small Business in America 2016.” Babson. [Accessed Feb. 24, 2017]

16“The State of Small Business in America 2016.” Babson. [Accessed Feb. 24, 2017]

17“New Survey Finds Small Business Owners Uncertain about Retirement Plan, Finances.” TD Bank. [Accessed Feb. 24, 2017]


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