How much of a nest egg do you need to remain financially secure for the rest of your life? Figure out how much money you need each year to live comfortably. For our purposes, let’s say that number is $35,000. Let’s also say that of the $35,000, you’ll receive $15,000 from social security. Therefore, you need to generate $20,000 on your own. How do you do this? You can start with $400,000. The chart below shows how you can take your $20,000 plus each year to supplement your $15,000 from social security. Note that the chart is adjusted for inflation. We’re assuming a retirement age of 66.

But what if you don’t have the nest egg? The good news is if you are age 50 and you have at least $25,000, there is still hope. By saving just $5,000 per year, you can be set at age 66. How? Saving $5,000 per year at a 12 percent rate of return starting with a base of $25,000, you’ll have $400,000 by age 66. If you save $10,000 each year, you’ll reach $400,000 by age 62.
What if you don’t have the $25,000 base to start with? You then will need a higher rate of return than 12 percent. How do you achieve a 12 percent rate of return or greater annually? The most likely way is by investing in the stock market. You’ll need to talk with an investment advisor to achieve your goal. Remember: the greater the return, the greater the risk.

Business financing
Financing in today’s environment, during an economic slowdown, can be a way to strengthen your business. The advantages include having monthly payments reduced by refinancing or taking out a new loan at low interest rates; acquisition of another business is possible at bargain prices; financial planning and business strategies can be formulated during such “down time.”

If you have decided to borrow, remember the Small Business Administration offers some of the best deals for small businesses in the way of interest rates. These loans are capped at the prime rate plus 2.75 percent, a better rate than can be found elsewhere. Additionally, an SBA loan has advantages over typical bank financing in terms of repayment period and structuring, and they can be had for as little as $50,000 and for as much as $2 million.

In order to obtain an SBA loan you must have good credit and be able to produce both business and personal tax returns for the past three years along with financial statements through the latest quarter.

Lenders will want to see tax returns and financial statements for any business you wish to buy. If you need the money to expand or make an acquisition, they also may require a business plan so that they know you have thought through everything.

If you have access to the Internet, consult the SBA web site at www.sba.gov to find the names of preferred lenders in your area or contact your local SBA office.

This article has been presented by PBS Tax & Bookkeeping Service, a company that has been providing income tax and bookkeeping services to the trucking industry for more than a quarter century. Contributions to this article were made by Shasta May, Director of Business Development for PBS. If you would like further information, please contact us at 1-800-697-5153 or visit our web site at www.pbstax.com.

“Everyone’s financial situation is different. This article does not give and is not intended to give specific accounting and/or tax advice. Please consult with your own tax or accounting professional.