By Karen Axelton
It’s no secret that all too many small business owners are unprepared for retirement. Many entrepreneurs expect the sale of their companies to support them; others plan to keep working pretty much forever because they can’t imagine retiring. But sometimes physical problems or life issues can force you to retire, and if that happens, you want to be ready.
Payson Roundup reports that women entrepreneurs are even less prepared for retirement than men are. According to the SBA’s Office of Advocacy, 19 percent of male business owners have 401(k) plans or other retirement plans, but only 16 percent of women entrepreneurs do.
Even among women business owners who do have retirement plans in place, they tend to save less than their male counterparts. Payson cites an Employee Benefit Research Institute study that male business owners with Individual Retirement Accounts (IRAs) have about $91,000 on average saved, compared to an average of just $51,000 for women.
These numbers are pretty pathetic, whether you’re a male or a female—so take steps to secure your financial future by looking into your options. Retirement plan products for business owners have come a long way from the days when only huge corporations could have 401(k)s. Some of the options the Payson article cites include:
- Owner-only 401(k) or individual 401(k)
- SEP IRA
- Solo defined benefit plan (also known as a pension plan)
- SIMPLE IRA