Jake DeKinder, Head of Advisor Communication, explains how capital markets have rewarded investors that are able to tune out short-term noise and stay disciplined over the long-term.
Business owners that want to pass their business down, or keep it forever… well, they sometimes forget that financial planning aligns your intentions and your resources, whatever they are. It is not about investments, insurance, taxes, or spreadsheets… it is about wise choices.
If you are passing your business down, you want it to be in just as good of shape, as you would if you were trying to sell it strategically.
To do that, it is important to get some diagnostics from an objective outside party. Your secession, contingency, and exit preparedness plans might be fine the way they are. But are your personal, legacy, estate, tax and family plans working with your business plans… or are they grinding gears?
You wouldn’t give your daughter a car that wouldn’t go into 5th gear. You wouldn’t give your son a boat with a motor that could get him stuck in the middle of the lake, would you? Don’t give your family the same headaches you have.
If I know anything about you, it’s this… you want to take care of your family better than you have taken care of yourself. So, start exploring your options 5-10 years before you intend to exit. It usually takes about 3-5 years (not 3-5 months) to exit the most successful ways.
There are many paths that and owner might take to either retire or exit form the business. It is important to realize there are different combinations of roles. About a quarter of small business owners want to retire from operating the business, but want to keep ownership. There are also many that want to sell it and completely walk away. Some see either using it up, or selling but remaining as the operator as the right thing.
More often a hybrid approach of multiple strategies produces the best overall outcome for the owner, the family, and the business. It all depend on your situation, your values, and your intentions.
Everybody gets affected by uncertainty. It may be different things to different people, but uncertainty can be scary.
We want to be that safe harbor that you can pull into and make sure everything is ok. It is part of our responsibility.
You might not need anything changed. Your plan might be perfectly on track. But sometimes, there are good course correction to be made.
What we want to do is find the space and time to process the anxiety, to get the monkey off your back.
Often, that is just having a conversation about your plan; the why, what, and how.
Beyond determining how much money to save, it’s useful to think about retirement in terms of how much income you’ll need after you stop working. Dimensional’s My Retirement Income Calculator can help give you a sense of how much income your savings could provide in retirement.
The 401(k) has become the sole vehicle for many people saving for retirement, says Jody Strakosch. With so much focus on a single plan to provide most retirement income, plan sponsors are more focused than ever on how to help participants have good outcomes, Strakosch explains.
How do we design DC plans to address the need for sustainable retirement income for investors? Professor Michael Drew of Griffith University highlights why the conversation must transition from “How much have I saved for retirement?” to “What’s my retirement income stream?”