Starting and running a business during retirement brings unique opportunities and challenges. As your trusted business advisors here in Wichita, we work with many business owners navigating this transition. Here are the essential financial and operational considerations to keep in mind.
Tips for Seniorpreneurs
Keep growing your retirement savings
Even while running your business past typical retirement age, you can continue contributing to qualified retirement plans. There is no age limit for adding funds if you have earned income. This provides an excellent opportunity to build your nest egg while doing work you enjoy.
Understand Social Security implications
Your business income affects Social Security benefits in several ways. Higher earnings can increase your future benefits since they’re calculated using your top 35 earning years. Delaying benefits past full retirement age (up to age 70) also increases your monthly amount. Remember that you’ll need to continue paying Social Security and Medicare taxes on business income.
Plan for required distributions
At age 73, you must start taking required minimum distributions (RMDs) from retirement accounts, even if you’re still working. The rules are complex. For example, business owners with more than 5 percent ownership can’t delay distributions from company plans until retirement. We recommend reviewing your distribution strategy annually with a tax advisor.
Navigate health coverage carefully
Medicare eligibility begins at 65 regardless of work status. If your business offers group health coverage, coordination between Medicare and your plan depends on company size. With fewer than 20 employees, Medicare is primary. With 20+ employees, your group plan pays first.
Adapt to market changes
Technology and business practices continue evolving rapidly. Focus on keeping your skills current while leveraging your deep industry experience. Consider bringing in partners or employees who can complement your expertise with fresh perspectives.
We're Here to Help
Need help optimizing your business strategy during retirement? Our advisors specialize in helping senior business owners thrive. Contact us to schedule a consultation.
