Planning for the next chapter

The thought of retirement or what’s next for you and your business is intimidating. But like many big decisions you make throughout your career, thoughtful planning will help set you up for success. That’s why in our 19th episode of the Sharing Knowledge Series, host Kevin Vonderau, chief lending officer at Westfield Bank, sits down with Gary D. Sirak, CLU®, ChFC®, president of Sirak Financial Services and author of How to Retire and Not Die: The 3 Ps That Will Keep You Young and Mark Dorman, AIF, CLU®, ChFC®, CFBS, CEPA, president & CEO of Legacy Business Advisors Ohio and Contributor to Forbes Business Council.

Kevin, Gary, and Mark discuss considerations and factors that impact personal retirement, business perpetuation, and succession planning. Below are some of the key takeaways from their conversation. Watch or listen to the full episode to learn more.

Personal Retirement

Knowing if, and when, to retire

When does a person know they’re ready for retirement? The reasons are all over the place, based on what Gary and Mark have seen. Recently, the pandemic, the state of the stock market, and a loss of interest in their career are among the top reasons for choosing to accelerate retirement. For example, having an inflated stock market can potentially prompt someone to retire sooner than originally planned.  

However, retirement is not necessarily for everyone. Those who are passionate about their work might not have any reason to stop working or they might get bored during retirement and want to return to work. “If you can find [work] that you’re passionate about… you’ll never work another day in your life,” Mark says

In Gary’s experience, those without a retirement plan in place can be met with stumbling blocks. “They spend more time figuring out their vacation for two weeks than [planning for] the next 26 years of their life,” he says. Retirement involves emotional, financial, and social aspects – each of which need to be carefully considered. 

Purpose, passion, and a plan.

These are the “3 Ps that will keep you young” referenced in the title of Gary’s book. He says that without these three considerations in place, individuals can quickly lose their sense of direction in life. Having a blueprint in mind of fulfilling activities you want to accomplish for others, a to-do list to complete each day for yourself, and a plan to execute will go a long way in maintaining that direction and purpose, especially during retirement.

Saving early and often

Mark details the key areas to focus on and notes that it can be easier said than done sometimes, but one of the most important things that young people (and anyone just entering the workforce) can do is invest in retirement. It’s never too early to set yourself up for a successful retirement even if it’s decades away. This speaks to the importance of planning, and knowing your objectives after retirement, especially how you envision spending your assets. This might include factors such as maintaining your lifestyle, being able to support philanthropic interests, and investing in your next generation.

A financial advisor can help examine your options and guide you through the most advantageous strategies for you.

Factoring in the economic climate

Economic events like a recession and inflation can significantly alter your retirement plans. All of a sudden, money that’s been saved up doesn’t get you as far as you once planned on. “That’s a significant headwind for anyone that’s in retirement right now,” Mark says. To adjust to the current economic realities, Mark and Gary suggest considering:

  • “semi-retirement” to scale back how much you are working while still earning an income
  • pushing out your planned retirement back a few years. 
  • accounting for social security filing, medical insurance planning, and the current distribution rate on capital, if you plan to retire now
  • an active commitment to “save as much as you can, and then some” 
  • touching base with your financial advisor to assess where you are, evaluate your plan, and adjust accordingly

Business Perpetuation & Succession Planning

While you’re considering your personal retirement, as a business owner, Mark adds, “it becomes 10x more complicated. Studies show that 90% of a business owner’s net worth can be tied up in their business.”  This means its crucial to work with a financial advisor that understands not only your personal retirement goals, but also business structures and exit options to transition out successfully. 

Knowing what your business is worth

This might sound surprising, but Mark shares that 98 percent of business owners don’t actually know what their business is worth. Finding out the value is crucial to how much it’s worth investing in a business, underscoring the importance of working with a professional who can give you this guidance. This value also has major implications when it comes to selling to a business and succession planning. With proper planning and valuation, businesses can sell for multiple times the amount they otherwise would have. 

Closing the gap

Once you know the value of your business today, Mark suggests asking yourself  “what does my retirement look like and what do I need to close that gap and how am I going to transition out of it.” Making the best choice on how to transition ultimately comes down to the owner’s goals and objectives, including wealth, leaving a legacy for your family or community, or taking a role in a different capacity.

The value of an advisor

Working with a financial advisor on savings and investment strategies can make a huge difference, for both individuals and businesses. Studies have shown that even with the fees of working with an advisor, investment plans under the guidance of a professional perform better than those without one. Advisors understand what their clients’ goals are and can provide advice and oftentimes a needed reality check before making a potentially bad decision.

To round out the discussion, the guests offer the top-line advice they’re giving to their clients right now:

Mark advises that “it’s critical that a business owner has an advisor that is assisting them build wealth outside of the business.” 

Gary tells his clients to “create a wish list of all the things you’ve wished you could do but couldn’t because you were working. When you get to retirement, you’ll need to figure out how to fill that life.” 

About our contributors 

Gary is the president of Sirak Financial Services and brings 40 years of financial planning expertise and insight. For the past 60 years, Sirak Financial Series, a Canton, Ohio based, family-owned financial services firm focuses on protecting, preserving, and prospering the future of individuals and businesses. Gary is also the author of a few books, including, How to Retire and Note Die, the 3 Ps That Will Keep You Young.

Mark is president of Dorman Legacy Advisors, LLC, Legacy Business Advisors and founder of the Legacy Advisor Network (LAN) and brings 30 years of experience working with business owners, executives, and retirees on business planning, retirement, and perpetuation solutions. Mark is also a continued to the Forbes Business Council and has penned multiple eBooks to support and advise small businesses.

Watch or listen to the full 19th episode of the Sharing Knowledge Series