A Guide for Small Business Owners
A Guide for Small Business Owners
Retirement isn't always a permanent state. Many retirees, including small business owners, find themselves returning to work, a trend known as un-retirement. Driven by various factors, un-retirement can offer financial benefits, personal fulfillment, and the opportunity to take on new challenges. Here's an in-depth look at why you might consider un-retiring and how to navigate this transition effectively.
Why Un-Retire?
Financial Need:
Rising living costs and unexpected expenses can deplete retirement savings faster than anticipated.
Returning to work can help bolster your financial reserves and provide a buffer against economic uncertainties.
Staying Engaged:
Many retirees miss the daily engagement and sense of purpose that work provides.
Staying active in the workforce can help maintain mental acuity and overall well-being.
New Challenges:
Un-retirement offers the chance to tackle new roles and projects, which can be fulfilling and stimulating.
Whether it’s a part-time job, consultancy, or a new business venture, these opportunities can bring renewed excitement and satisfaction.
Helping Former Employers:
Your expertise and experience can be invaluable to previous employers who might welcome your return.
This can also help ease the transition back into the workforce, given the familiarity and existing relationships.
Financial Implications of Un-Retiring
Impact on Social Security:
If you return to work before reaching full retirement age, your Social Security benefits may be temporarily reduced based on your earnings.
It’s crucial to understand how additional income will affect your benefits and overall financial plan.
Tax Considerations:
Additional income from un-retiring can push you into a higher tax bracket, affecting your net earnings.
Consulting with a financial advisor can help you navigate these tax implications and optimize your financial strategy.
Steps to Un-Retire Successfully
Identify Your Value:
Reflect on the skills and experience you bring to the table. Understanding your unique value proposition will help you target the right opportunities.
Start with a Previous Employer:
Former employers already know your capabilities and might be more open to rehiring you. This familiarity can make the transition smoother and more comfortable.
Leverage Your Contacts:
Utilize your professional network to find new opportunities that fit your skills and interests. Networking can also provide insights into emerging trends and job openings that might not be publicly advertised.
Preparing for Un-Retirement
Evaluate Your Financial Situation:
Assess your current financial health and determine how much additional income you need.
Consider the long-term implications of returning to work on your retirement savings and overall financial plan.
Plan for Work-Life Balance:
Decide how many hours you want to work and what type of job will best fit your lifestyle.
Ensure that your new role allows for a balanced life, giving you time to enjoy your hobbies and family.
Stay Informed and Updated:
Keep abreast of industry trends and continue learning to stay competitive in the job market.
Enroll in relevant courses or training programs if necessary to update your skills.
Conclusion
Un-retirement is a viable and increasingly common option for many retirees, including small business owners. Whether driven by financial need, a desire to stay engaged, or the pursuit of new challenges, returning to work can offer numerous benefits. By carefully considering the financial implications and strategically planning your re-entry into the workforce, you can make the most of this exciting new chapter.
Ready to explore un-retirement? Contact us at Diversified Asset Management to ensure your financial plan supports this transition.
For personalized guidance tailored to your unique situation, contact Diversified Asset Management, Inc. at info2@diversifiedassetmanagement.com or (303) 440-2906. Our experts can help you navigate the complexities of business succession and ensure a successful transition.
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Robert J. Pyle, CFP®, CFA, AEP® founded Diversified Asset Management, Inc., in 1996 to provide personalized, comprehensive wealth management services to successful individuals, families, single women, and business owners. His specialty is addressing the complex financial needs of self-employed professionals, corporate executives, and small-business owners. Our disclosure can be found here. The views, opinion, information, and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc. Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting, or tax advice.