How to Save for Retirement When Owning a Business With Your Spouse

Owning a business is amongst the best feelings in the world. And your spouse is a partner in business doubles the feeling! But while you are working hard to establish, advertise, expand and grow your business, having a retirement savings plan in place should be a part of the business blueprint too! It is estimated that a couple running a business together should save 15% to 20% of their savings for retirement funds regularly. 

Since both of you have the same source of income, it can get challenging to figure out how the actual savings for retirement will come from. There could be alternative ways to save for retirement; it is best to seek professional advice and assistance to learn good money management techniques. If yours is a young entrepreneur couple, knowing how to save for retirement at 30 is a milestone to unlock!

And while it can get difficult to decide how much to save, Multipl is a handy app that makes it possible to determine how to save and helps to set aside that amount regularly. This blog explores how you can save for retirement when running your business with your spouse. 

How to Save for Retirement

Allocate your money

  • Calculate a rough lump amount of expenses you’ll require after you retire, taking the inflation rate into account. It will assist you in making the best financial decisions that will have desired outcomes.
  • Plan monthly meetings to discuss your budget and any anticipated significant purchases, such as renovations, travel, or a second car.
  • Only put your money into portfolios that will benefit you both. Consider any additional expenses, such as a vacation, a charitable donation, or a hobby that either of you would like to pursue after you retire. 
  • Take into account the potential of your spouse retiring early to start a business.

Think about your age and your health.

One of you is likely to outlive the other. Also, if you and your partner have a bigger age gap, consider this when planning your retirement. When it comes to preparing a plan to save for retirement, age disparity is crucial. 

One of you might have to take money out of your retirement fund far sooner than the other. This may necessitate a whole different financial strategy. To assist the one who retires first, you could invest a portion of your funds in debt assets that provide security and regular income.

Know what you can invest in

First and foremost, after you’re entirely debt-free and have a fully loaded emergency fund (three to six months’ worth of expenses saved), we recommend putting 15% of your gross income toward retirement. Take advantage of tax-advantaged accounts. Also, invest in well-established growth stock mutual funds.

Here Are Some Of The OPTIONS You HAVE?

  • The National Pension System (NPS) is a long-term financial program that focuses on retirement. It is made up of various assets like stocks, government bonds, and corporate bonds. Reliant on your risk tolerance, you can select how much of your money can be put in various asset classes.
  • The National Savings Certificate (NSC) is a government-backed post office savings instrument. It functions similarly to a five-year fixed-rate mortgage. As a result, your NSC savings will mature in 5 years, earning you 6.8% annual income. However, the whole amount is only due at the end of the term.

So, let’s say you have a five-year-out target. NSC is a risk-free investment. However, compared to Debt or Hybrid Funds, it has drawbacks such as a 5-year lock-in period and lower returns.

  • Tax Rebate FOR SAVER

Starting a business does not automatically imply that it will be profitable. In most cases, the reverse is true (you will spend more than you earn). E.g., suppose your adjusted gross income is less than ₹ 1,00,00,000, and you are filing as a married joint, and the government will give you money in the form of a tax credit. 

It’s like back when the company matched the donation, but the government is doing the same this time! Please go here for additional information on this credit.

  • Life Income Guaranteed

It’s a savings and security plan with guaranteed benefits and a predictable income. This strategy can be used to align long-term and short-term financial objectives. In addition, your post-retirement expenses will be well-managed with the corpus you have established over the years if you have a guaranteed regular income.

When the market is so volatile, and HDFC retirement savings fund can be the ideal option for you.

Plan Today for a Smoother After-work Life Together 

It will be determined by several circumstances, including whether or not you have workers, your final goal, and how much you want to invest. We hope this piece inspires you to start developing something or consider a different choice than the one you already have in place. Of course, as a couple-owned venture, the decision to emphasize your future together would be totally up to you.

Also read- 7 things you can do today to stop stressing about money

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