Retirement Savings: Side Businesses for Growing Wealth

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In our quest for financial stability and success, many American workers are simply not satisfied with the regular paycheck and benefits that come from traditional jobs. These regular paychecks certainly do help pay the bills, but in today’s economy, it can be tough to get ahead, even on the salary a well-paying job provides.

Many workers have found ways to boost income while doing something they love. The following article is about establishing a side business to help ensure a stable, comfortable financial future. Read on for details about how side businesses can empower you and give you financial options you have only dreamed about.

The “Side Hustle”

Working a part-time job in addition to a full-time career is often referred to as a “side hustle”. The catchy name has taken our culture by storm; it is even featured in a popular television commercial for a ride-sharing app, where the commercial’s tagline is “get your side hustle on.” That part-time job is one way of supplementing income from your primary employment, but many people are deciding to forge ahead on their own, establishing their own part-time business ventures to boost wealth.

Almost everyone has dreamed about working for their own purposes at one point or another. Translating a personal passion or hobby into a lucrative business venture is a time-honored American small business tradition. Today, the time is ripe for startups based on those passions and hobbies. Online tools provide all the details into starting a business, and there are even step-by-step guides to developing and launching home-based businesses. Local libraries often have such guides available if you can’t find them on the Web. These guides provide all the information needed to set up and run a business, often needing little or no funding to get it going.

The purpose of starting a small home-based business can have many facets. Primarily, the goal of many people is to bring in additional income. That income may be simply used to enjoy life more fully. Vacations, travel, and collectibles – all these are made possible by additional disposable income. Smart people, however, use some of that additional income to help fund retirement plans for the future.

What are the Benefits of a Side Business?

As technology changes the way we work, many market sectors are at risk of automation taking over for human workers. Downsizing at companies in a tightening economy is always a possibility as well. So, establishing a side business can help protect against the financial risks associated with losing one’s primary job.

What are some of the other benefits? Side businesses can:

  • Help you grow wealth in addition to regular salaries and income.
  • Help protect you against financial hardships due to unforeseen circumstances like surprise car or home repairs, medical bills, and lost job income.
  • Help empower those who start businesses, giving them options for today and for the future.
  • Give you the additional income needed to maximize contributions to retirement plans.

It is that last point that is critical for those interested in retiring comfortably. If you have a job with employer-sponsored retirement plans like a pension or a 401(k), financial experts in the retirement industry stress that you must make the maximum contribution every year in order to ensure enough savings for the future. Many workers skimp, or don’t fund their plans to the maximum allowed by law. This leaves money on the table, especially in situations where employers match contributions to plans with dollar-to-dollar amounts. Establishing a side business brings in additional income, freeing you to make those important contributions to employer-sponsored plans at your full-time gig.

How to Start Your Side Business

As mentioned earlier, there are myriad online and print guides that offer step-by-step instructions on launching a small business venture. That’s all well and good, but what sort of business should you launch?

Successful entrepreneurs and business experts suggest that people look at what they’re good at and what they enjoy. Perhaps you are great at sales and marketing, or your writing skills are above average. Parlaying your personal talents and strengths is often the means to starting up a rewarding side business.

Also, it pays to look at the various markets in your area. Perhaps you can identify a niche that is underserved or a service that is lacking from the local area. Leveraging market demand can create side businesses that bring in additional income with little or no out-of-pocket expenses.

One you have your million-dollar business idea, there are many online platforms that are designed to help you reach out to waiting customers. Some of the most popular are eBay, Amazon, Etsy, and Fiverr. No matter which direction your side business takes you, there are digital resources to take advantage of. A little study and market research goes a long way toward ensuring your financial success.

What if I’m Already Retired? Can I Start a Side Business?

The short answer is YES! If you’ve already retired, it’s not too late to supplement your income with a side business that you operate from your home. Be advised, though, that income levels beyond a certain point can interfere with government programs like Social Security and Medicaid benefits.

If you are a retiree past the age of 70 ½ and you’ve started to take your Required Minimum Distributions (RMDs) from qualifying retirement accounts, additional income from a side business can push you into a higher tax bracket. Paying more taxes than you need to is never fun, but when you’re retired, that can seriously impact your financial future. The best advice for retirees who want to supplement their income with a side business is to seek the help of a financial professional. Retirement planners and financial advisers can offer insights into the amount of money you can safely make without interfering with tax brackets, government retirement programs, and distributions and withdrawals from retirement plans. They can also help you invest some of your new income into plans that will keep you financially stable well into the future.

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