You may have heard that Social Security benefits are running low. This is concerning to anyone, but small business owners have even more to consider.
After all, your retirement funds don’t really come from running your business – they come from selling it at the end of your career. If there’s no Social Security cushion, what happens? Let’s talk about it!
At CSI Accounting & Payroll, we’ve advised small business owners on a variety of financial topics for nearly 60 years. A major part of that is your retirement! That means we’ve answered these questions hundreds of times:
- Are Social Security benefits running out? Will the government fix this?
- How do Social Security benefits affect small business owners like me? Are they needed to
retire? - How can my payroll provider and accountant help me prepare for retirement?
Are Social Security Benefits Running Out?
On its present course – with no changes – Social Security WILL run out. But I say that the government always finds a way to fix things, whether it’s by printing money or using an actual strategy.
The Social Security Administration (SSA) admits that the funds are projected to be depleted by 2037. At that point, they will be paid at a reduced rate: 76 percent of the current benefit.
Fortunately, the SSA also admits that they need to fix it ASAP – and that they plan to. They state, “Further modifications of the program are a certainty as the Congress continues to evolve and shape this program, reflecting the desires of each new generation.”
When Social Security was projected to run out in the past, the government already stepped in by tiering retirement benefit ages. If you retire earlier, you get less in Social Security benefits each month, but if you wait just a few years, you can collect more per month moving forward.
Financial professionals and policymakers have speculated that tiering could be expanded, or the cap on taxable earnings could be raised or removed. Dozens of other methods have been suggested.
Regardless, we won’t know more about a solution until the government brings us into the conversation. So, what do we do in the meantime? Keep reading to learn more about how Social Security affects you and how professionals can help with your retirement.
How Social Security Benefits Affect Small Business Owners
I recently saw a millionaires study by Ramsey Solutions (founded by popular financial advisor Dave Ramsey). It reveals a lot, but what stood out to me is that Ramsey said only 15 percent of millionaires held a senior leadership role like a vice president or CEO of a company.
Even though small business owners might get a big chunk of change when they sell their business, it’s often not enough to retire on. Social Security benefits (and retirement plans) can help fill those gaps.
Not sure how much you can expect from Social Security? After making a MySSA account, you can check your estimated benefits directly from the SSA! They will be based on your top 35 highest-earning years.
Not sure if you’ll have enough to retire on? That’s where companies like CSI Accounting & Payroll come in. I’ll tell you what we do in the next section.
How Payroll Providers & Accountants Help You Prepare for Retirement
Earlier, I mentioned that most small business owners profit off the sale of their business and cushion it with Social Security benefits and retirement plans.
I already talked quite a bit about Social Security benefits, so let’s discuss strengthening those other two areas with a payroll provider and accounting service like CSI Accounting & Payroll.
Retirement Plans
I’ve worked in payroll for decades – and payroll goes hand-in-hand with retirement plans that you can also contribute to as the owner. That millionaires survey I mentioned says that eight out of 10 millionaires invested in their company’s 401(k) to reach their millionaire status.
Don’t know how to get started with a 401(k)? If you partner with CSI Accounting & Payroll, we’ll handle the works when it comes to payroll (including ensuring you meet your state’s retirement plan requirements), and we’ll also put you in touch with our 401(k) plan partner.
The government will be happy that you’re staying in compliance. Your employees will be happy that they can contribute to a retirement plan. You’ll be happy that you can supplement your Social Security benefits, even if they get reduced. Chat with CSI today!
Maximizing Business Sale Price
Didn’t think we could help in this area? Think again. This is where our monthly accounting service jumps into action.
Consistently operating at maximum profitability is the goal, which is why monthly accounting can be a great option for small businesses in a stable position and looking to grow. Monthly accountants can even advise you on the tax advantages of contributing to your new 401(k)!
However, monthly accounting can make a world of difference even if you just do it for a short period before selling your business. How? Monthly accountants can help you with succession planning – so you can ethically and legally sell your business for top dollar.
Maximize Your Retirement Funds!
Now that you know how Social Security benefits are running low, how these benefits are crucial to business owners’ retirements, and how a payroll and monthly accounting service can help you prepare for retirement, are you ready to check out CSI Accounting & Payroll?
To see if we can be a good fit for your business, click the button below for a free consultation:
Not ready to talk? That’s okay! First, learn more about what it’s like to work with us by clicking the image below:
