Did you know - Your 401K could do more for you?
If you do a simple Google search to ask if people are prepared for retirement, the perception is that most Americans are not prepared nor are they preparing adequately for retirement. A recent article in Money magazine by Elyssa Kirkham quoted a study by GoBankingRate that stated that Americans just aren’t prepared to retire.
“Whether due to various economic factors or not correctly prioritizing finances, many people are not on track to have enough money to cover their expenses during retirement. 56% of Americans have less than $10,000 saved for retirement.”
A CNBC contributor Kathleen Elkins seems to agree in a 2016 article.
“Nearly half of families have no retirement account savings at all...The median for all families in the U.S. is just $5,000, and the median for families with some savings is $60,000.”
But what if they are wrong. There are educated economic analysts that disagree with the above sentiment. Andrew Biggs, resident scholar at the American Enterprise Institute and contributor to Forbes Magazine stated in a 2016 article that 89% of U.S. citizens had some sort of retirement account.
“What percentage of households aged 30 to 64 with per capita earnings in excess of $20,000 have either a 401(k) or IRA-style account or some entitlement to a traditional pension benefit? The answer, according to the Survey of Consumer Finances, is 89 percent.”
I’ll leave it to people smarter than I to debate the status of American’s retirement preparations, but I will speak from my experience. Many of the people that I come in contact with have been saving for retirement, but many aren’t ready to retire. It has nothing to do with their abilities financially. I come in contact with people that are frustrated with their current work situation, but they feel trapped by their circumstances. Maybe they work for a large corporation and they feel like a number. Or they work for a small business owner/boss that doesn’t fully appreciate them. Most are what I honorably call "grinders". These people weren’t born into wealthy families. They’ve not made huge sums of money over the years, and they don’t have huge bank accounts. These are hardworking, self-motivated, committed folks. Usually these frugal minded, diligent people have saved money in a 401K or some other type of retirement account. Many of these people have always dreamed of owning their own business, but didn’t think it was possible. They just figured they were always going to work for someone else because they didn’t have the resources. My experience is that many of these people are saving for retirement, and if they have been working for 10+ years they usually have enough money in those retirement accounts to fulfill their dream of being their own boss.
In the last 6 months, I’ve sold two businesses with excellent Cash Flow (Business Sold) to buyers that didn’t realize they could use their retirement funds to purchase a business.
Not to mention, they didn’t realize that they could use those funds penalty free and without paying taxes on it for withdrawing it. Most people that I talk to believe their 401K is off limits until they reach a certain age, or they think they must pay significant penalties and taxes to use it before that age. Fortunately, the CBI Team has developed a relationship with an outstanding CPA firm that helps people with 401K savings to utilize those funds to make a down payment to purchase a business (BORSA). This program is great for people that believe they have what it takes to be a successful business owner and leader. This program is great for people that would rather invest in themselves, rather than let a mutual fund manager determine the return on their investment. This program lets you put your money to work for you.
If you’ve dreamed of owning your own business we might have the business for you (Businesses For Sale). If you want more control of your future and would rather invest in you instead of Wall Street we would love to help you out.