3 Major Things Lawyers Should Know About Retirement Planning (Before It's Too Late)
Retirement planning - we all know how important it is, right?
But when you’re self-employed (no 401k plan in place like big firms get!) and running a busy practice (retirement is a long ways away, and who has the time?), retirement planning can take a backseat - until you hit your late fifties and think, “Am I gonna have to work forever?”
Here’s our guide to three major things lawyers should know about retirement planning - before it’s too late.
Think about an exit strategy long before you’re ready to retire.
You don’t have to work until the day you die - yes, I actually had a lawyer say this to me once. You can, in fact, profit from your business when you retire and make it a large portion of your retirement strategy. The direction you lead your firm can be dictated by your exit strategy. What’s your long-term goal for your future - what do you see yourself doing?
This is something I discuss with my financial roadmapping clients. When they sit down to think about what retirement looks like to them, we can begin to form an exit strategy plan. For many lawyers, when they’re ready to retire they’re ready to retire - they want to sell their firm or their share of it, get a nice payout, and enjoy their well-deserved time off.
How do you do that? You need to have an attractive, profitable firm that other lawyers want to buy and that banks want to loan money for. That’s not something that happens overnight. Cleaning up your books and maximizing your profits has to begin a long time before you wake up on your 65th birthday and think, “I’m ready to hang up my hat and retire this year.” A good accounting firm and smart financial roadmapping can help get you on the road to an effective exit strategy and a profitable sale.
Don’t just rely on your tax accountant OR your financial planner.
When the tax guy and the retirement guy work together for you, it creates a financial force. These two professionals can optimize a retirement strategy using information about business and family, strategically investing while at the same time saving on taxes. If they work separately and don’t communicate, you’ll be missing out on major strategy and savings.
At Core Solutions Group, Inc.,we work with financial roadmapping clients to pull together all their money professionals to create a financial dream team of smart people who are working towards one common goal: to make your business as profitable as possible, so you can have as much money in your pocket and retire as comfortably as possible.
Invest - the smart way.
Even if you’re running a very lucrative and profitable firm, you still need to spread the love, so to speak. Don’t put all your nest eggs in one basket - you’ll need to find smart, proven streams of additional income to help you diversify your portfolio. There are many things to consider when looking into investments and many factors that dictate strategy. The good thing about being a lawyer with a successful firm is that you usually have more capital to invest than the average person. If you take a percentage of your money and invest strategically, you can fund your retirement so that you have options. Not a bad thing to have when planning on retirement, huh?
If you’re ready to start talking financial roadmapping with Core Solutions Group, Inc. or have any questions about retirement strategy for attorneys, click here to learn more about our services and to book your free 20-minute efficiency audit.