Owners need a concrete retirement plan and timeline

NEW YORK — Small-business owners may want to save for retirement but are anxious about diverting money away from their companies. But many owners have found ways to invest in themselves as well as their businesses.

Some tips about saving from owners and financial advisers:

Saving for retirement can be easier if an owner creates a concrete plan and timeline. Thea Ducrow, who is building an advisory business, needs to focus for now on marketing her new Baton Rouge, Louisiana-based company. But, she says, “My goal is to begin saving for retirement again by the end of the first quarter of 2019.”

Nathan Fisher, senior executive vice president of Fisher Investments 401(k) Solutions, suggests owners ask themselves how much they want to save each year for the next few years.

Owners who don’t think they have money for savings may find it by looking for ways to reduce expenses and increase revenue. Ducrow says her pricing strategy is not to set her fees too low — that gives her the income that she can set aside. Shamila Nduriri, owner of Las Vegas-based jewelry company Dalasini, decided to open a business with high margins because it would give her more flexibility to save.

Business owners who expect to sell their companies to fund their retirement need to think now about whether they’ll be able to find a buyer or get the sales price they’re hoping for, says David O’Brien, a financial adviser with Revolution Advisors. For example, if the owner is the company’s biggest asset, it may not bring the price an owner hopes for unless the owner brings in or promotes employees who can keep the business going.

Owners still have time to set up retirement accounts for themselves and employees and get tax breaks for this year. Simplified Employee Pension, or SEP, plans can be set up well into 2019 and still qualify for a 2018 deduction. Information is available in IRS Publication 560, Retirement Plans for Small Business; owners can find it on the IRS website, www.irs.gov .