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Is Time On Your Side? W
hen it comes to retirement, time definitely matters. As to whether it is on your side or against you depends on
your age. Two important factors of a success- ful retirement are time and money. One does not work very well without the other. Get- ting ready for retirement calls for long-term planning, and it is never too early to start. Given time, a small investment may grow into an amazing amount—at least something that will be significant toward your success- ful retirement. Compound interest and the “rule of 72” illustrate this very well. When two factors representing interest and time (years) multiplied by each other equals 72, the principal has doubled. Thus, money at 7.2 percent interest will double in 10 years.
Say you’ve just graduated from dental school and are ready to go to work, but you have $250,000 in student loans. The first thing on your mind is to pay off your loans … but, not so fast. If you buy a home and a car, there are likely more loans. Buy a dental practice … more loans.
While you definitely want to pay those loans down, don’t forget to pay yourself first: This means, start your retirement savings now. Even with just $5,500 (the maximum IRA contribution for 2017) you are able to save on taxes by deducting this amount from your in- come and at the same time grow that sum at 7.2 percent to $88,000 by age 67. That’s from one deposit of $5,500 at age 27. In this case, time is on your side, but you have to fund it.
? Many business owners unintentionally postpone planning
and funding their retirement. Whenever time or money is shorted, the likelihood of enjoying a successful retirement are greatly diminished.
Contact MDIS for retirement planning resources.
Honest Answers. Practical Solutions. Personal Service.
Too many small business owners avoid the crucial elements of planning for their futures. The top reasons given are 1) Not generating enough revenue; 2) Focused on paying down debt; and, 3) Selling the busi- ness as the retirement plan. In the real world and in business, there are many variables, and your situation won’t be as simple as presented above. Yet, there is no substitute for starting to save early so as to give yourself the luxury of time for your money to grow or to recuperate from a loss or correction in the market.
If you have a retirement plan currently or haven’t gotten started yet, we think you should consider the MDIS Multiple Em- ployer 401(k) Savings Plan. It represents sav- ings through lower fees and plan expenses, increased opportunities and higher limits on contributions, and less work, responsibility and liability for you—the business owner. The end of the year is drawing near, and this is a perfect time to consider any changes you need to make for improving your future. Whatever your situation, we can help find a solution that works. f
CONTACT GREG at MDIS to learn more about the MDIS Multiple Em- ployer Savings Plan as well as other retirement strategies. Email greg@ mdis4dds.com or call 800-944-7550.
