We are all unique, not just in the obvious ways but also in our personal goals and the goals we set for the businesses we own. For example, as an independent pharmacy owner, your goals are different than those of a restaurant owner. Here are some of the most common goals the pharmacy owners we work with tell us they want to be sure to achieve:

As I began searching for “what I wanted to do when I grew up”, I struggled to pinpoint a field I could really feel excited about. During college at East Tennessee State University, I ended up finishing with a BS in Business Administration. Like most new college grads, I wanted to find a career where I could make a difference in the world, but I also needed an income, so I started in banking. I moved to commercial sales and then to retail management where I gained an appreciation and a lot of respect for small business owners. Although these positions were critical in my career path, I did not feel particularly passionate about any of them.

Pharmacies today have found themselves caught in the middle of a vicious ongoing cycle of rising expenses upfront and delayed revenue.  This cycle is wreaking havoc on cash flow for the average independent community pharmacy. Obviously, cash flow is extremely important in any business. With shrinking margins and decreasing reimbursements, the independent pharmacy industry is no different.  As cash flow suffers, pharmacy owners are forced to focus on the short-term.  Saving money for retirement typically takes a back seat.

As the last quarter is starting, now is an ideal time to conduct an annual check-up and review on your current Pharmacy’s 401(k) retirement plan. A quick annual look of a few simple things can dramatically impact your ability to retire on your terms. A well-constructed 401(k) will also ensure the viability of your community pharmacy after you have retired. As time moves forward, goals and objectives change as well. It is important to take these changes into account when developing a strategy for retirement.  The following is a list of 3 critical areas that pharmacy owners should review in their 401(k) retirement plan.

Although different for everyone, some moments and decisions can alter your life path forever. In pharmacy, one might consider obtaining a degree, getting a new job, quitting a job, deciding to become an owner, and retirement to be turning points. Some events are random and cannot be controlled; others are more calculated and planned.

Not happy with the performance of your current 401(k)? Is it the investment choices? Is it the economy? Is it the plan design? Is it the advisor? Is it due to fees?

Some decisions on who to call or get advice from are easy, while others can take some time to figure out.

Around this time of year, independent community pharmacy owners and small business owners alike start evaluating their retirement plan.  Wait... What? You don't do this?  Well don't worry, you are not alone.  In fact, you are in the majority.  The first sentence should read, "This is the time of year for business owners to start evaluating their retirement plan."

Working with independent community pharmacy owners, we see one type of retirement plan that is very popular, the SIMPLE IRA.  Its all in the name, simple to start and simple to maintain.  What pharmacy owners have found, however, is that when using a SIMPLE IRA, even when maxing out contributions, saving enough money to reach their retirement goals is not likely.  For that reason, many pharmacy owners have now started looking into moving to a 401(k).

The following is a simplified rundown of what you need to know about switching from a SIMPLE IRA to a 401(k).

I have a friend, Roy, who owns a business consulting firm out of South Carolina. He had a very successful career as a CPA, and found his passion in retirement when he began consulting small business owners. Starting with a few clients, it snowballed into a booming business. Now in his early 70’s, many refer to him as Coach Roy. Roy often takes the time to discuss points of business, leadership, networking, and professional development with me. Being an author with the gift of gab, Roy tends to have a knack for turning a phrase. About three years ago, he gave me a coaster like cardboard disk quoting one of his infamous phrases. I keep it on my desk. The words circle the outside of where a drink would sit and state in bold red letters, “Round Tuit”. I must admit, when Roy gave me this, I did not understand what it meant. Was this some sort of business Latin term they did not teach me in college? Was it something from his time in the military, and I should show the utmost respect for it and what it stands for? I politely smiled and thanked him for the gift. Luckily, he began to explain.

The Cardinal Show was a great place to debut Pharmacy401k!  We were able to talk and show thousands of independent pharmacy owners how to maximize saving for retirement and how to attract, retain, and reward their most valuable employees. 

If you were there, thank you for stopping by.  If you missed us or were not able to attend, here are a few things we learned from pharmacy owners regarding retirement plans.