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EPISODE #059

Business Income: Is This The Best Thing In Your Retirement Plan?

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5 Ways Your Wealth Is Under Attack book

5 WAYS YOUR WEALTH IS UNDER ATTACK

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The 19 Sources of Retirement Income: Business Income

In this episode, John continues his series on the 19 Sources of Retirement Income. He discusses the benefits of holding on to your small or medium-sized business in retirement.

John is the author of 5 Ways Your Wealth is Under Attack. He is also a seven-time winner of the Five StarSM Wealth Manager Award.

Don’t miss John’s key points:

  • When deciding whether to sell your small or medium-sized business in retirement, ask yourself:
    • Do I still enjoy aspects of the business like relationships with staff and the intellectual challenge?
    • Do I have—or can I hire—key competent personnel who can oversee the day-to-day and allow me to take a smaller role, focusing on the aspects of the business that I enjoy most?
    • Is there a compelling financial or personal reason to sell it?
  • If you answered yes to the first two questions and no to the last, you may want to maintain your business. It can be hard to replace business income in retirement. You will lose many tax benefits.
  • Depending upon the business type, business income has wonderful tax benefits. For example, depreciation, depletion, and—depending on the type of business—the qualified business income deduction (in Section 199A of the tax code), which allows 20% of the annual income to be tax-free.

And more:

  • Business income—depending on your succession plan, your buy-sell agreement, and your role in maintaining that business—may be the best thing that you have in your plan.
  • You can’t make a decision unless you know what your business is worth, what your strategy is, and how your current income will be replaced in your retirement plan should you sell.

We can help you (1) build a retirement blueprint, and (2), put a number on what your business is worth. We have business evaluation calculators that can help with that. Then we ask, “What are the variables you can tweak to make the business more valuable? How do you make it more profitable so that you can take more money out? How do you maximize the qualified business income deduction?”

For more, listen here. Then visit us at smallwoodassociates.com and click the “let’s get started” button, connect with us on social media, or call us at (800) 797-1000. Set up a free, no-obligation 30-minute phone call with an advisor to discuss your plan.

Talk to a Smallwood Wealth Management Financial Advisor

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