Contribute to Retirement
Reason #11 for Implementing Profit First in 2024 - Contribute to Retirement
Planning for Retirement Contributions with Profit First
Retirement may seem like a far-off dream for small business owners, but with the Profit First method, it’s achievable—and sustainable! By prioritizing profitability and structuring your cash flow intentionally, you can make consistent retirement contributions just as you would pay operating expenses or guarantee your salary.
Here’s how Profit First can help you plan for retirement:
1. Prioritize Savings First
This is the main tenant in Profit First: setting your priorities, and allowing the cash to follow. Allocate a specific percentage of your revenue to a dedicated retirement account as part of your owner’s pay & compensation. This makes saving for your future a top priority.
2. Use Multiple Accounts
Set up separate accounts for Profit, Owner’s Pay, Taxes, and Operating Expenses. From your Owner’s Pay, allocate a portion for retirement contributions and direct it to an IRA, 401(k), or another plan. Optimizing the ratio you are able to pay yourself allows you to create the margin to support your salary and full benefit package, such as retirement contributions.
3. Consistency is Key
Stick to a regular schedule (weekly or biweekly) for allocating revenue, including your retirement savings. Automating this process ensures consistency and discipline.
4. Control Spending — Match with Intention
By limiting funds for day-to-day expenses, Profit First helps control overspending. Keep your retirement account untouchable to protect it from unnecessary withdrawals.
5. Review and Adjust
Quarterly Reviews of your financials allow you to adjust allocation percentages as your income or goals change. Partner with a financial advisor to ensure your retirement strategy stays on track.
Your Future Starts Now
With Profit First, you’re not just building a sustainable business—you’re securing your future. Start planning for retirement today, and take control of your financial destiny!
Ready to implement Profit First? Let’s work together to make your business—and your retirement plan—thrive.