Retirement planning must take into consideration your unique goals and your unique financial position at various stages throughout your life. One common mistake many are now making is relying on income from their business to maintain their finances through retirement. In this latest post, our team highlights why this retirement planning strategy is a mistake for the Northern California business owner.
Diversification is critical
In any investment strategy, diversification of funds is critical to avoiding losses. For those who are putting all their resources into their business for retirement planning in Northern California, this could lead to the loss of resources over the long-term. It’s important that you review a full range of investment strategies to plot the right course for your retirement and the security of your financial future.
Businesses can lose value quickly
One large issue with relying on your business for your retirement is that the business can lose value quickly, and often without warning. It might be that one of your customers has a significant complaint and this complaint is picked up by local media, causing stock value to plummet. Or it might be that you make a poorly considered investment, which leads to the company suffering losses for a sustained period of time. The small business landscape can be unpredictable and it’s no environment for your retirement funds.
Competitors are growing consistently
Just as your business once grew exponentially over a short period of time, so could your competitors’ businesses. They could come out with a new product or service that takes customers away from your firm and toward theirs. As you enter your retirement, you won’t have the energy or the will to fight back and come up with new strategies for your business.
There could be a recession
Likewise, factors outside of your local economy could impact your business. The national economy could fall into a recession right as you’re about to sell your business before retirement, leaving you with a fraction of the income you expected.
Planning for retirement in Northern California requires you to consider the advice of an experienced advisor. Take the time to book a consultation with Montgomery Taylor, and put financial leaders to work for your retirement.