Retirement Planning for Business Owners in Chicago

Many people currently do not have a proper retirement plan in place. Indeed, the AARP reports 60 percent of American adults lack core estate planning documents. CNBC reports a large percentage of Americans have not saved enough for their retirement. For business owners, careful and fully personalized retirement planning is especially important.

A business owner who lacks a well-constructed retirement plan will likely leave money on the table. Even worse, their company may run into serious problems in the future. In this post, our skilled Chicago business law attorneys highlight some of the most important things Illinois business owners need to know about retirement planning.

Retirement Accounts for Small Business Owners

Business owners have several different personal retirement planning options available. In developing the best strategy, it is crucial to remember the number one adage of retirement planning is: Do not put all your eggs in one basket.

Business owners need to diversify. You cannot rely on your company, or any other single source of savings or assets, to support you during retirement. Some of the best retirement planning options for business owners in Northern Illinois are as follows:

  • Setting up a Simplified Employee Pension Individual Retirement Account (SEP IRA);
  • Creating a Savings Incentive Match Plan for Employees Individual Retirement Account (SIMPLE IRA);
  • Putting money into a 401(k); and
  • Developing a traditional pension plan.

There are benefits and drawbacks to each of these options. It is advisable to build a retirement plan that uses more than one of these retirement options. All business owners should consult with an experienced professional who can offer guidance that is well-suited to their specific situation. In some cases, business owners may be able to reduce their tax liability now and produce additional savings and growth in the future.

The Importance of Business Succession Planning  

Beyond saving enough money for retirement, business owners also need to consider the future of their company. Every business owner should have a carefully crafted business succession plan ready to go. Whether you are a sole proprietor, a member of a partnership, or you own a large stake in an LLC or corporation, it is imperative a business succession plan is in place. Without a proper succession plan, the company may struggle to survive if you choose to — or are forced to — retire from the firm. Succession planning is especially important for small business owners. Among other things, the plan should include:

  • Selection of a successor or a clear process for choosing a successor;
  • A formalized training procedure; and
  • Details for how the plan should be carried out.

Get Help From Our Chicago Business Lawyers Today

At North Suburban Legal Services LLC, our Chicago, IL business law attorneys provide effective and sophisticated legal representation to small and midsize business owners. To learn more about what we can do for you, please contact our law firm today at (312) 909-6089 for a free, strictly confidential initial consultation.

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