No matter if you are a business owner or an employee, we cannot stress the importance enough of the "softer side" of retirement.
Don't get us wrong. Yes, it is important to make sure that you save enough during your accumulation years (pre-retirement) to make sure that you have a big enough nest egg (and other income sources) to cover your retirement lifestyle. In addition, you want to ensure that your portfolio is invested properly during the accumulation and decumulation years.
However, retirement can be an emotional experience for a lot of people. For small business owners, the transition from being an entrepreneur to retirement can have a significant emotional impact on the individual.
Imagine you are a small business owner who has put their blood, sweat, and tears into growing their business. Your identity is woven into the work that you do and the business that you have built. Letting that go and moving on into "retirement" can be challenging.
Overcoming The "Emotional Retirement Hurdle" For Business Owners
The question then becomes, how do you overcome this emotional hurdle or mental block that most business owners have when transitioning into retirement?
A holistic financial plan and a business exit strategy are critical starting points.
Once those are in place, it becomes more of a personal, mental obstacle for the business owner. A few tips and ideas include the following:
Create a vision for what you want your retirement to look like. Maybe it looks like being completely done with work (and your business), or you could phase out over a period of time. In addition, you can also move on to a new business or entrepreneurial venture that aligns with other personal goals or interests. Outside of the "work" element, you also want to include how you will spend your time during retirement. Imagine you are already there in the future. How will you spend your time? What will you do? Maybe it looks like spending more time with family than you ever could have during your working years. Alternatively, it could be picking up several new hobbies to keep busy. By creating a vision for retirement, you will be much more excited for what is to come as you get closer to that next phase of your life as a business owner.
Include family members and close friends when creating a vision for retirement. This will allow you better to understand the relationships and community most important to you. By doing this, you will potentially get perspective shifts when prioritizing your time in retirement. You may be surprised at the blind spots others can see in us. At the end of the day, relationships and community are so meaningful.
Talk to mentors or someone more senior than you, a business owner and now retired. You can gain some valuable words of wisdom by getting their insight into their retirement experience.
Don't rush into retirement if you are not fully ready. If you are a business owner, you may enjoy your work. It is 100% okay to have a passion for the business that you have built. Retirement may look different, and it may take longer to enter into the normalcy of "retirement." Take your time mapping it out, and you will be much more confident in your decision.
We Can Help!
Entering retirement can be scary and unknown territory for most business owners.
However, you do not have to navigate that path alone.
The tips and ideas to consider when approaching retirement highlighted above are areas of focus that we walk our clients through. We ensure that a holistic financial plan is built, an investment strategy is aligned with your goals, and a business exit strategy is mapped out. By diligently working through these important items with our clients, we aim to ensure the success of our clients both personally and professionally.
Our firm is here to partner in ensuring you achieve all you want in life, your personal finances, and your business. We specialize in working with minority business owners. Please get in touch with us to schedule a 15-minute introductory call.