When most people talk about retiring, they are mostly referring to leaving their paid jobs after attaining the age of retirement and settling in to enjoy the rest of their lives doing what they love. Have you ever thought about how you should prepare for retiring as a self-employed person? And why exactly should you retire when no one is mandating you to?
These are some of the questions that plague self-employed folks especially as they approach their golden years. This article provides some practical insights into how to go about it.
As a self-employed person, the best time to have started preparing for your retirement was early in your business’ lifecycle. However, an average business owner does not think about that – not then, and not for several years after. In fact, some don’t think about it at all. It is for this reason that we see many vibrant businesses begin to deteriorate upon the passing of the founder.
Therefore, it is very imperative that you build a solid retirement plan for your future. Yes, it is going to be tougher to do because you are retiring as a self-employed person and you will have to figure it out on your own. However, with a little bit of creativity, discipline, setting up structure and planning, you can enjoy your retirement years.
Steps to follow to plan for retirement as a self-employed person
Set up a Retirement Account.
One of the foremost and important things to do before retirement is to set up an account for your retirement. You have the option to either create a savings account or an investment account. This is a top priority and this is where most people get it wrong. Savings accounts pay almost nothing unlike fixed or investment accounts and you should factor that in. Financial institutions offer investment services where people can grow their money. Once you have set up an investment account, you can follow it up and manage it monthly. Just setting it up isn’t enough!
Depending on your income, the amount needed to retire differs from person to person. It is possible you are faced with low wages and not able to save enough for retirement. So, you might want to seek the help of a professional here. They will tell you how much you need to save in your retirement account every year considering items like inflation and income. You could also invest into businesses. It is however crucial to be very careful and strategic with investments. Always read, research, and ask questions before you invest in any business.
Set a feasible goal.
As the years go by, you will need to start setting specific, feasible and measurable goals by defining what you expect for your lifestyle after your retirement. Some of the most essential needs to also think about include health care and accommodation.
Set up structure in your business.
Many self-employed people find it difficult and sometimes impossible to retire because their businesses revolve around them and merely taking some time off seems difficult to envisage, talk less of retiring. However, it is vital that you empower people and entrust them to carry out most if not all of the job functions you held so you can retire happily knowing that your business will keep on running and that your legacy won’t be forgotten.
Grow your social network.
Another huge step to a fulfilling life after retiring as a self-employed person is having a social network. It is very crucial to grow your social network so that when you are retired, you would have people with whom you stay connected as required. One of the best ways to achieve this is to maintain strong relationships with the people around you.
Don’t be afraid to step out of your comfort zone as one of the greatest regrets many people in retirement express is wishing they had taken more chances in life.
Think health not wealth.
According to an AgeWave study, more than 80% of today’s retirees say health is the most important ingredient for a happy retirement, meaning that the majority value good health even over financial security. So, the best retirement plan involves not just your finances but also ways to stay mentally and physically healthy.
Living a healthy life is crucial because it improves your quality of life and reduces the amount of money you may spend on doctor’s visits. Therefore, a regular exercise regimen coupled with a healthy diet should be top priority for you.
To conclude, your retirement as a self-employed person is definitely something you should begin to plan for as early as you can. If you did not start planning early in the business, then the next best time to start is now. Seek expert help where necessary, craft your exit strategy and begin the implementation as soon as possible.
