- Establish a Solo 401k to make up for the years you didn’t save for retirement
- With the Solo 401k high contributions, you can save enough to turn your dreams into a reality during retirement.
- Always establish a self-directed plan at a Trust company, not a bank or financial institution.
Are you passionate about wine? Would you like to turn that passion into a business when you retire? In this article, we’ll show you show retiring to run a winery is possible when you save for retirement with a Solo 401k.
It’s important to note that you must meet the eligibility requirements to establish a Solo 401k: (1) self-employment income, (2) no full-time employees.
Maximize Your Savings with a Solo 401k
Saving for retirement is something everyone needs to do, but not everyone plans for it correctly. Studies show Americans are not saving money at the rate they need to, in order to accomplish all the goals they have. While disheartening, you don’t have to become a part of that negative statistic.
However, if you are currently in this statistic, you can “catchup” by establishing a Solo 401k plan. The Solo 401k has a higher maximum contribution than a Traditional, Roth or Self-Directed IRA. It will allow you to save more for retirement, and make up for the years you may have lost. Make sure you start your Solo 401k at a trust company, such as IRA Financial Trust, to gain complete control over your retirement investments.
Have a Clear Goal in Mind
Every big objective needs a solid goal behind it. For example, if you have a passion for wine and want to transform your passion into a money-making venture, you can start your own winery/vineyard or purchase one that already exists before or during retirement. You may end up becoming the next Colign Cellars, a Napa Valley wine business that was recently sold for a rumored value of $65 million!
With a clear goal in mind you can better plan for retirement and arrange your savings to help you run your winery once you have retired. But what do you need to get the retirement of your dreams? It’s more than just money. It’s a knowledge of what you need, who you need to help you, where you want to be, and how you can get there.
Owning a winery is not for the faint of heart. There are risks and rewards, just like for all opportunities, but wineries have very specific ones as well. Because you are owning a piece of property, location is a major concern, as opposed to, say, someone investing in stocks, which they can do online from essentially anywhere.
Start Your Own Winery or Purchase one that Exists?
First decide if you’re going to want to purchase an existing winery or start your own. There can be less risk in buying an established business, since you will likely receive business contacts already interacting with the company. An existing location will also come with a history of the site – you’ll know how much rain there was, how many grapes were grown, how many bottles produced, if tourism affected the bottom line positively or negatively, and so on.
If you’re looking to start a winery from scratch, you have to recognize some challenges inherent in the situation. Land needs to be procured, which you’ll need to research thoroughly, seeking out the most information possible to make a decision. Whether you’re looking in California, New York, or France, climate will make a difference to what kind of grapes can be grown, and therefore what kind of wine can be harvested.
Running a Winery Takes Patience
It can also take years for a winery to become profitable, so purchasing or investing in an existing business that is already turning a profit may make better business sense for you. While you’re planning your retirement, make sure your Solo 401k is helping your dreams become reality by saving up to your goal amount.
With the Solo 401k, you can maximize your retirement savings thanks to the plan’s high contributions. In 2020, the Solo 401k contribution can be as high as $57,000 (under age 50) or $63,500 (age 50 and older). You can even use your Solo 401k to invest in similar businesses as you plan for your retirement, so that you are well-versed in what you’re looking to retire and do.
Risks of Running a Winery
Selling alcohol is not for the faint of heart. There can be red tape to get through as you start and build your business. Local and federal regulations must be adhered to in order to get your wines to market.
There’s a vast amount of physical work that can be needed with planting vines, especially if you are attempting to do it all yourself. If you’re not interested in the labor part of owning a winery, you may be better off hiring in workers who can help, while you supervise. Preparing the land is necessary even before your vines come in, if you’re starting from scratch. And ensuring your stock is producing well is a concern every year.
Owning a winery is fast becoming a statement for the truly affluent, but can offer retirement benefits for anyone willing to start saving early, develop a plan, and really learn the business. Whether you’re producing for someone else to bottle or doing it yourself, you’ll be in a world of fascination. Having a prestige business like a winery and even your own brand may make you the ultimate oenophile.