I’m always fascinated by lists, especially those that show the differences in this wonderful country of ours. For example, I recently learned from a list that, in Wisconsin, our favorite Halloween candy is Starburst, while in New Jersey, Tootsie Pops are king. As the end of the year approaches, I thought it might be interesting to examine the differences in how well each state sticks to its New Year’s resolutions.
Apparently, if you live in South Dakota, you have a 37.5% chance to keep your New Year’s resolution, according to a 2018 survey from Vitagene. This isn’t necessarily a regional thing, because South Dakota’s neighbors to the south, in Nebraska, are among the worst at keeping promises to themselves, with 9.5% of folks keeping their resolutions.
If a move to the Mount Rushmore State is not in your future, you should still come up with some plans for the upcoming year. Following are three items a small business owner might want to consider.
Save for Retirement
Business owners often state that their business is their retirement. However, for tax advantages and diversification purposes, consider maxing out your retirement plan. Contribution limits are going up in in the year 2020. An individual can put up to $19,500 into their 401(k) plan and another $6,500 if they are age 50 or older (both up $500 from 2019). For those new to the over-50 catch-up contribution, consider making that a designated Roth contribution to build up your tax-free “bucket” in retirement.
Long-term Care Planning
More than 50% of small business owners are over the age of 50. Because someone turning 65 today has a 70% likelihood of needing some type of long-term care services, a strong consideration should be made for some type of coverage. There may also be tax advantages for a business owner, if the long-term care policy is run through the business.
Many small business owners do well when it comes to building and growing their company, but are in the dark regarding what happens to the business when they are no longer there. About two-thirds of small businesses have no succession plan. Talking to business and estate planning attorneys can help you develop a plan, even if you’re not sure that plan may yet be.