Prepare for your future with tailored retirement plans for each stage of your career.
By Carrie Volmer, With Alexis Bennett
IRAs, mutual funds, HSA and FSA accounts, tax deductions, and life insurance—planning for your future can be overwhelming. Unlike regular full-time employees who have human resource offices and pamphlets to peruse, as a horse trainer you’re often left to navigate retirement planning on your own. While the freedom of owning your own business comes with its own perks, this area can feel daunting, and as a result is often neglected.
In this three-part series, you’ll learn about three phases of financial planning:
Part 3: The Out-to-Pasture Plan
The Out-to-Pasture Plan
This is the trainer who’s enjoyed a long career and wants to slow down. You may have a couple of horses of your own, and perhaps, even ride a few client horses. Your income may have dropped and your priorities shifted to family and travel.
At this point in your career, you’ve hopefully been saving for your retirement so you can begin drawing on accrued investments, retirement funds, and social security to support yourself. If you’re just starting, you’ll have to look hard at your income and expenses so you can save for the time you can no longer work.
Investing: If you don’t have an existing investment account, you can set one up now. Contribute as much as possible before your income stream is completely shut off. This isn’t the time to be aggressive though. Instead, choose a moderately aggressive plan with an equal blend of stocks and bonds. A fixed annuity with a guaranteed rate of return or another CD-like investment that’s principal-protected are other appropriate options. The return may be less, but they’ll be less volatile as you look to retire.
Healthcare: If you qualify, choose a high-deductible plan with an HSA. Contribute as much as possible to your HSA, which allows catch-up contributions. Medicaid premiums are eligible for payment with HSA funds when you become eligible. If you need ongoing medical treatment for back pain, surgeries, or other conditions, choose a low-deductible plan with an FSA.
Other assurances: If you still have significant income, choose a permanent life insurance policy. If, however, you’ve already retired without a plan, consider term life insurance at a lower cost.
Plan your estate and work with an attorney to develop a living will so you have a plan for the future of your family; physical assets, such as your property, barn, and other facilities; and any horses or livestock that you still care for.
As you plan to retire, begin to downsize to a property or facility that’s more manageable. Even if you don’t plan to retire completely, plan for what you’ll do when you’re no longer able to maintain your facility, including day-to-day upkeep and property taxes. If you’re worried you can’t sustain it, downsize while it’s still in good shape and when you can sell at market value, not after it requires a large cash investment to make it attractive to sellers.
Read the rest of this article at the links above.
