Women Business Owners: Overcoming the Failure of Tomorrow

By Michael J. Searcy and Jessica A. Kmetty

For the past few decades, women have increasingly turned their creativity, ingenuity and business acumen into entrepreneurship, with the number of women-owned businesses near 10 million and growing. While women strive to run successful businesses and overcome the challenges of ownership today, it becomes easy to neglect setting up a retirement savings plan which could help secure a successful future. Without a retirement plan, these women and their employees could work for years, striving to build a successful company, only to fail financially in retirement.

One finding from the U.S. Small Business Administration’s Office of Advocacy shows that women business owners are less likely than male business owners to have a 401(k), or similar, plan. Couple this with the fact that women average a longer lifespan than their male counterpart and the result is women facing longer retirements with insufficient funds to make it through. Women business owners may be hesitant to set up a retirement plan due to perceived costs, ongoing maintenance, and lack of design flexibility that has accompanied plans in the past. However, if you take a look today, you will see there are now great options that are reasonable in price, with plan administrators that can help ease the maintenance requirement and come with the added benefit of potential tax savings and deductions.

Owners also put retirement plans on the back-burner because they bank on the success of their business to provide the income needed for retirement. In a best case scenario, this option might work for the owner. However, you cannot predict what the economic conditions will be when it comes time for you to retire. The business could experience unprofitable years, or not be viable for selling, leaving you with no back-up plan to fund your retirement.

The successful sale of your business also doesn’t take into account the financial future of your employees. In a recent survey, 6 out of 10 workers reported their 401(k) is their primary source of retirement savings. Setting up a retirement plan for your company is as much a benefit to your employees as it is to you as an owner. Giving them the option to save for their future through a company-sponsored retirement plan shows thought and care toward the people helping you build your business, and can help you attract additional talent to your team.

Women business owners have significant power today to help shape the financial future of our nation. The good news is you don’t have to figure this out on your own. If you’re not working with a financial advisor, contact one who can explain the retirement plan options best suited to your business. Once you have the information, you can feel confident in choosing a retirement plan that will fit your needs. By giving yourself and your employees a tool to develop a solid financial foundation for their futures, you can help millions overcome the failure of tomorrow.

Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this content, will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for you or your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Searcy Financial Services, Inc.

The content of this letter does not constitute a tax or legal opinion. Always consult with a competent professional service provider for advice on tax or legal matters specific to your situation. To the extent that a reader has any questions regarding the applicability of any specific issue discussed in this content, he/she is encouraged to consult with the professional advisor of his/her choosing.  

Published for the blog on December 16, 2015 by Searcy Financial Services, your Overland Park, Kansas Fee-Only Financial Planner and Investment Manager.