According to the recent Small Business Banking in Ontario Study released by Meridian, Ontario’s largest credit union, 20 per cent of Ontario small business owners are kept up at night worrying about how they will save for retirement. Business owners who focus on the day-to-day operations and lose sight of their retirement goals are cautioned that they could be at risk of derailing their dream retirement.
“Retirement planning is extremely important to everyone but many small business owners can get caught up in the multiple, daily duties required to run their business, putting their retirement plans on the backburner,” says Jeff Brown, Meridian’s Vice President, Delivery Initiatives and Business Integration “But retirement planning is a marathon not a sprint, so it’s important for small business owners, like everyone else, to start saving for retirement as soon as possible.”
A trusted financial advisor can coach small business owners on ways to take advantage of opportunities to save for retirement while growing their business, which can help to minimize stress in their personal and professional lives. Choosing a financial institution that takes the time to understand their business can also help owners overcome some of today’s biggest challenges, including saving for retirement, budgeting and cash flow.
To help small business owners start saving for their retirement now, Meridian offers the following tips:
Create a personalized financial plan: Work with a trusted financial advisor to create a personalized financial plan separate from your business plan. Be honest with your advisor and give them the full picture. Let them help you meet your goals. Make sure to meet with them at least once a year to re-evaluate your plan and make any adjustments necessary to keep you on track to reaching your financial goals.
Invest automatically: Saving for the future today isn’t difficult if you put your savings on auto pilot. Many financial institutions provide pre-authorized contribution plans (PACs) that automatically transfer funds from your chequing account into your savings investments on a regular basis. PACs are a great tool for contributing to Registered Saving Plans or Tax-Free Saving Accounts and if you coordinate the withdrawals to align with your payday the money won’t even be missed.
Take advantage of other resources: You can get some great budgeting advice from a variety of sources including software programs that help you track your day-to-day spending. Many financial institutions also offer online tools like budget calculators and educational webinars that will help keep you and your business on track. Meridian’s online Small Business Centre (http://smallbusiness.meridiancu.ca/) is packed full of practical information to help small business owners manage their business, including guides, templates and interactive tools.
Get help when you need it: Discuss the areas where you need help with a network of trusted professionals (e.g., financial advisor, accountants, lawyers, etc.) who can help you get the job done right.
“And very importantly: resist the temptation to dip into your retirement savings for your business. It is very important to keep your personal and business accounts separate,” adds Brown.
For more information, visit meridiancu.ca.