Why Your Business Isn’t Your Retirement Plan (And What to Do Instead)

What is the best retirement plan for entrepreneurs? The one that doesn’t rely on your business at all.

Entrepreneurs often ignore their personal finances and invest every dollar back into their businesses. Miljan Zivkovic/Shutterstock

There’s no doubt that your business is your pride, primary source of income, and even your identity. It’s no wonder that entrepreneurs assume that one day they’ll cash out and retire comfortably with their company’s earnings.

The hard truth, though, is that your business is not a retirement plan. As a result, treating it like one can seriously put your future in jeopardy.

The Peril of Banking on the Big Exit

There are many possible exit scenarios, like a sale to a competitor, a private equity buyout, or passing it on to the next generation. Although these outcomes are possible, they’re not guaranteed.