Myth 1: I already pay Social Security. I do not need to do any other planning.

According to the Social Security Administration, “Social Security will replace about 40% of your annual pre-retirement earnings.”^[1] Thus, you need to have a plan if you wish to maintain your lifestyle once you are no longer working.

As a self-employed individual, you are responsible for finding the right retirement plan since you do not have an employer that has selected one for you. Working with an experienced planning team means that you can find the right investment tools for your future and ensure that they are properly funded and protected regardless of what your life may look like.

Additionally, it is important that you have a plan for what happens if there are any funds left in your retirement or investment accounts. What you leave behind for your loved ones needs to be properly protected. An experienced planning team can ensure that your loved ones are provided for in the most beneficial way.

Question 1: What are my options for the future of my business?

Depending on the nature of your business, you may have some options when you either no longer want to work or are no longer able to work. Maybe you will be able to sell some part of your business to an employee or competitor. This would supply you with cash to fund your retirement or provide for your family upon your passing. However, in order for this to happen, your business has to have something to sell.

If you are an independent contractor providing services, you may not have anything that can be sold when you are done working. If this is your situation, it is important that you are setting aside money to provide for your and your loved ones’ futures.

Question 2: How many people do I need to meet with to properly plan for my future?

To ensure that you are properly protected, there are several different advisors you should consider employing to help you plan for your future. First, you should work with a financial advisor who can walk you through what you currently own, help you articulate your future financial goals, and craft a plan to get there. You should also work with a reputable insurance agent to ensure that both you and your business have the proper insurance. You should consider a variety of insurance options, such as disability insurance to provide income when you are unable to work, life insurance so you can financially support your loved ones after you have passed away, and maybe an umbrella policy to help protect you from any risks that you may be undertaking in operating your business. Next, it is important that you work with the right tax professional to ensure that you are reporting your business and personal income appropriately and availing yourself of the available tax credits and deductions. Additionally, an experienced business law attorney can advise you on the best way to operate your business and help provide you with maximum asset and liability protection. Lastly, an experienced estate planning attorney can help you control what will happen to you, your money, and your property while you are alive but unable to make your own decisions and to your money and property at your death, as well as make arrangements for any dependents you may have. Without a proper plan in place, these decisions will be made by a judge in accordance with state law, which may result in decisions you would not have agreed with.

Because the stress that comes with the death of a loved one is painful enough, you don’t want to add a financial burden on top of that emotional pain. That’s where an asset protection law firm can offer the estate planning strategies to give you peace of mind now — and they’ll also help your family and business avoid problems if you pass away without a succession or a distribution of assets plan in place. At The Law Offices of Murphy & Associates, we are here to help you navigate the estate planning process, while keeping you and your family’s best interest in mind. Reach out to our office today to schedule a consultation with our estate planning attorney to learn more.

^[1] Soc. Sec. Admin., Pub. No. 05-10706, Retirement Ready: Fact Sheet for Workers Ages 61-69 (2023), https://www.ssa.gov/myaccount/assets/materials/workers-61-69.pdf.