Don’t Bank Your Retirement on Your Business
 
Investing in your own business makes sense. Many businesses achieve significant growth each year. However, when you consider that many small businesses fold every year, it becomes clear that banking your retirement solely on the success of your business might not be the best idea. There is no guarantee that your business will continue to grow or even maintain its current value. If your business is worth less than you were counting on at the time you planned to retire, you could be forced to continue working or sell it for less than what you were expecting.
 
Business owners often assume that their businesses will be their main source of retirement funds, but that strategy can be riskier than you think. It’s generally not wise to put all your eggs in one basket. Broadly diversifying your assets may help protect against risk.
 
Diversification involves dividing your assets among many types of investments. Putting all your money into a single investment is risky because you could lose everything if the investment performs poorly — even if that investment is your own business. Of course, diversification is a method used to help manage investment risk; it does not guarantee against the risk of investment loss.
 
Consider what would happen if you were planning to rely solely on the sale of your business to fund your retirement, only to have the U.S. economy fall into a recession about the time you planned to retire. If one occurred when you planned to retire, it could affect the sale of your business or the income it generates for you.
 
Likewise, there is no assurance that a larger competitor won’t overtake your market, or that demand for your business’s goods and services won’t weaken because of new technology, rising energy prices, consumer trends, or other variables over which you have no control.
 
Your business is almost certain to provide some of the money you need to retire. By building a portfolio outside your business, you are helping to insulate your retirement from the risks and market conditions that can affect your business. 
 
This material was written and prepared by Emerald.
© 2010 Emerald
Scott E. Zakalik, CPA, P.C.
6605 Pittsford-Palmyra Road, Suite W-6
PO Box 180
 • Fairport, NY • 14450
Phone: (585) 425-1040 • Fax: (585) 486-1234
www.sez-cpa.com • solutions@sez-cpa.com
*Securities and investment advisory services offered through FSC Securities Corporation (FSC), Members FINRA/SIPC
and a registered investment advisor.  Additional investment advisory services offered through Independent Planning
Group, Inc. (IPG), a registered investment advisor.  Scott E. Zakalik, CPA, P.C. and IPG are independent of FSC.
 
IRS Circular 230 Disclosure: This website (including any links) is not intended or written to be used, and
it cannot be used, for the purpose of avoiding penalties under U.S. federal, state, or local tax laws.
 

Should the viewer leave this site via a link contained herein, and view content that is not provided by Scott E. Zakalik, CPA, P.C. or FSC Securities Corporation, the viewer does so at its own risk. The content to which you link will not have been developed, checked for accuracy, or otherwise reviewed by Scott E. Zakalik, CPA, P.C. or FSC Securities Corporation and we are not responsible for damages or losses caused by any delays, defects or omissions that may exist in the services, information or other content provided in such site, whether actual, alleged, consequential or punitive. Scott E. Zakalik, CPA, P.C. and FSC Securities Corporation make no guarantees or representations as to, and shall have no liability for, any electronic content delivered by any third party, including, without limitation, the accuracy, subject matter, quality or timeliness of any electronic content. 

Copyright © 2010 Scott E. Zakalik, CPA, P.C.  All rights reserved.