Getting close to retiring? How to prepare your business
Are you getting close to retiring? Find out how best to prepare your business for financial security.
Some people choose to live, work, retire and die peacefully without having to move out of their comfort zone or their birthplace. And who could blame them? After all, there’s truth in the saying that there’s no place like home.
But this mantra may not be true to all, especially as some states are friendlier to retirees than others.
If you want to know how to plan your retirement properly, seek out the services of financial advisors, lawyers, and accountants. Do your research and take a closer look at the most-retiree friendly states, based on the taxes they collect, the costs of health care and living, and healthcare services for seniors.
The best ways to prepare for your retirement
With retirement comes less responsibility for the family’s finances and more freedom to pursue one’s passion. However, you’ll also be in for other forms of fiscal challenges.
Here are some of the best ways to prepare for your retirement:
1) Set your retirement goals
The key to planning your retirement properly lies in coming up with a retirement objective and setting a time frame, as well as outlining the steps you need to take in achieving your goals.
2) Consult with professionals
Speak with professionals who can offer you the best retirement planning services. They’re the ones whom you can work with to achieve your objectives.
3) Determine your spending needs
There are a lot of factors that may affect your spending needs. Healthcare services and cost of living are only a small part of the overall equation.
Consider the mortgages you have to pay, your travel plans, and the lifestyle you want to keep, as well as unforeseen expenses. Don’t forget to consider the taxes you have to pay for.
4) Create other revenue streams
Soon-to-be retirees seeking to invest their hard-earned cash should consult with professional wealth management and financial planners like Churchill Management Group before proceeding. A diverse investment portfolio helps ensure that you have enough income to fund your spending.
5) Start a new business
Another way to create a revenue stream that can fund your retirement is to start a business. There’s no limit to what type of business an expectant retiree can establish, as long as it’s a business venture that’s close to your heart.
According to Forbes.com, Utah, Florida, Texas, Colorado and California, are a few of the best states to start a business in. So, if you’re a retiree living in these states, don’t hesitate.
However, even though being able to choose the type of business you really want is one of the perks of starting a business as an expectant retiree, you still need to plan things out and be smart in getting that venture up and running. You can’t make your idea successful by just waving a magic wand.
The key steps to take are as follows.
Taking start-up costs into account
Don’t use a retirement fund to start your new business. You’d have no nest egg if it were to fail. Should you plan to start a business later in life, put money away for the upfront costs by having a savings fund. Doing so will allow you to do what you want for your business upon your retirement without jeopardizing your future.
Researching your business idea’s viability
Ask what other people think about your business idea. Your idea may be great for you, but, for others, it just wouldn’t work. This scenario is possible, especially if you’re unaware of a certain industry’s current trends. Or it can also be that you’re overestimating the market.
This is where your former colleagues and impressive network of friends as a senior worker come in and become of great help. Your connections might be able to give you some brilliant pieces of advice.
Coming up with business, financial, and marketing plans
You need to have an idea of how much money you have to spend, what are the things you can do within that budget, and how you’re going to get the word about your business out. Think about and answer these questions.
6) Plan how your estate is administered after death
The main purpose of estate planning is to ensure that you don’t leave this world subjecting your family to financial and legal challenges. Estate planning facilitates proper distribution of your assets and saving your heirs of the lengthy and costly probate process.
Being that there are estate laws that govern this undertaking, consult with lawyers and accountants to help you out on this.
7) Consider the best states to retire in
The Kiplinger Washington collected various data from government and private institutions including U.S Census Bureau, United Health Foundation, healthcare service providers, and the academe, to come up with a list of 20 best states for retirees in 2019 and here are the top states that made it to the list.
About 15.2% of this State’s population is composed of the elderly aged over 65 years. The cost of living is 4% below the U.S average, and the average healthcare costs are lower, too, running only about $415,297 for a retired couple, versus the average U.S. spending of $423,523.
These low spending costs are made more attractive by the fact that South Dakota is among the most-tax friendly states for retirees. Social Security income and withdrawals from retirement accounts are tax-exempt.
Everything sounds peachy in this State, which, apart from having a warm, cozy weather, also boasts of being one of the most tax-friendly states for retirees. Like South Dakota, the cost of living in Georgia is below the average US rate, while its average annual healthcare costs, is also one of the cheapest, at $404,460, for seniors.
Like its neighboring southern state, retirees in North Dakota can do more with their money, as the costs of living and taxes are low. Then only downside is that retirement income and Social Security benefits are taxable, but only for a low rate— from 1.1% to 2.9%.
Country music and hot chicken are not the only attractions in Tennessee. They’re appealing to seniors, too, because of affordable healthcare and living costs, which is pegged at about 12% below US average. Social Security retirement benefits and income from retirement accounts are not taxed, as well.
Aging workers have another reason to say, “Sweet Home, Alabama”. Another country-music loving state, Alabama is included in the best states for retirees, being that it does not impose taxes on Social Security retirement benefits.
In addition to tax exemption, the cost of living in the state is 13% below US average. Retired homeowners there enjoy the lowest property tax rates in the country.
Living in “paradise” may come with a cost but Hawaii is still included in one of the best places for retirees. That’s because the average income for individuals aged 65 years and above, is one the country’s highest, while its healthcare services, ranked as highly efficient, is wallet-friendly, pegged at 11.4% below the national average.
This state’s appeal lies in the fact that it’s tax-friendly to retirees, who enjoy a household income that’s 11.3% higher than the national average. Aside from having a lower-than-average healthcare cost, retirees can also expect to save on the cost of living in the “Mother of States”.
The Sunshine State has the highest retiree population, at 19% or 3.8 million according to a 2019 article in the Kiplinger. Besides the attractive tax-friendly policies, including exemptions from state income tax, estate tax, and Social Security or other retirement income, Florida also boasts of a sunny weather and lovely beaches that’s highly appealing to seniors.
If you want to stay active past retirement, consider relocating to Utah, as the state offers several outdoor activities that allows you to stay in tiptop shape. The cost of living is about 4% higher than national average, but seniors in Utah enjoy income levels that are above average, too.
Ready to plan for your retirement?
Planning for retirement is a challenging undertaking, being that a soon-to-be-retiree should learn how to make stable income opportunities work for his or her projected spending.
The best way to achieve a doable retirement plan is to diversify revenue streams and consider relocating to states that offer retirees with better benefits and lower spending requirements. Discuss your goals and plans with financial advisors to see how you can make it work realistically.