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Small Business Retirement Planning For Business Owners

Many business owners often forget to take care of themselves. We help business owners have a simple and flexible retirement plan.


Small business owners are completely responsible for their retirement planning, which may be a little daunting to some. Also, if they have employees, then they may also feel like they are responsible for helping them with their retirement plans. That is why small business owners should consider their retirement plans and those of their employees.


However, figuring out where to start may be challenging, which is why people reach out to financial advisors for advice. People who want to learn more about retirement plans for small business owners should reach out to us and continue reading below.

Choose a Traditional Retirement Plan

There are many traditional retirement options for people, like an IRA or a 401K. These can be used as other sources of someone’s retirement income instead of liquidating their own business. However, each has its pros and cons, so the owner should decide on what they want in exchange for completing their retirement plan and following it.


Additionally, they should think about whether they want to contribute money to their employee’s retirement plans or not. This will affect which plan they choose for their small business.


The Kelley Financial Group has years of experience in guiding businesses and individuals through complex financial matters.


The SIMPLE IRA stands for the savings incentive match plan for employees. This is a retirement plan that small business owners can access. Employees will be able to add money into their retirement plan pre-tax. Employers can then contribute to the SIMPLE IRA as well, which will help the team when they are ready to retire.


Employer contributions are also tax-deductible.


The SEP IRA stands for a simplified employee pension. This means that both the owner and the employee can contribute. It works like the SIMPLE IRA because the employer can contribute money to the plan. This amount will be tax-deductible, but the employee will not need to pay taxes on it until they want to remove it from the plan when they retire.


Almost every small business can open a SEP IRA. This account can be open whether the person has a small employee pool, a partnership, a proprietorship, or non-profit management. Every year, the employer can decide how much money they are willing to put into the account, which gives them more leeway about how much they want to put in every year.


The feature of flexible employer contributions can be beneficial in a down year because they are not obligated to put in the same amount as the year before. Owners are also considered business employees so that they can put money into their accounts.

IRAs and a Solo 401K

Business owners in a competitive field may need to offer a SIMPLE or a SEP IRA to get employees. However, they are also not required to offer any retirement plans for employees. Therefore, many businesses will not involve their employees in company plans. Employees could instead open a Roth or a traditional IRA. These can be opened by anyone who has an employment income.


People can also contribute to their spouse’s IRA on their behalf. A Roth IRA allows people to put in money after taxes, and they can take it out tax-free during their retirement. When someone opens a traditional IRA, they will need to contribute money pre-tax, but they will also be taxed on their money when they take it out during retirement.

An Exit Strategy Is Needed

One of the first things every business owner needs to consider when planning their retirement is their exit strategy. If their small business has become their biggest asset, they may need to liquidate it when they retire or be able to have it run without them.


However, it may be beneficial to keep an eye on the market because the market conditions will greatly affect how much someone will get for their business if it is sold. That is why it is encouraged to put some flexibility into a retirement plan as it is beneficial to sell their business when the market is strong. Most business owners do not want to find themselves in the unenviable position of selling their business is a distress sale.


When someone sells their business for their retirement but has left it too late, this becomes a distress sale. Buyers will see that the owner is desperate to sell their business, so they will most likely not receive a premium offer. An experienced financial advisor can help create a personalized plan when they should begin selling their business.

Why Should People Speak to The Kelley Financial Group?

The Kelley Financial Group comprises passionate, knowledgeable, and experienced people who want to help every business owner plan for retirement. The team understands that it can be a daunting task for people to think about because there are many different plans out there. Still, there is a plan that every business owner can benefit from regarding their small business retirement planning.


When a KFG team member speaks with a client, they want to ensure they have created a plan that will benefit them. This way, it is not a struggle for the self-employed to retire.


Even as a small business owner, transition or retirement is inevitable. The last thing anyone wants is to be left stranded during their retirement or to be left with little to no money that will support them. Creating a small business retirement plan can help you on your path to financial independence; That is why people should speak to the team at The Kelley Financial Group.


Having a financial advisor that cares about the person and their needs can help business owners create a personalized plan for their goals and desires. Any questions should be asked at (412) 528-1920.

This material is prepared for The Kelley Financial Group’s use. 

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material. 

The Kelley Financial Group and LPL Financial do not offer tax or legal advice or services. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

Building Your Financial Future

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