If you are solo or part of a small firm, how much thought have you given to retirement? My wife and I started meeting with our financial advisor long before I went out on my own, and that’s the main reason we even have a retirement plan apart from what she would get from her employer by default.
It’s hard to think about socking money away (and how much do you need to save, anyway?) when you are struggling just to keep the lights on, but you need to. The longer you wait, the harder it is to catch up. Selling your firm is one plan, but putting all your eggs in that basket is mighty risky.
Some food for thought: How Much Money Do You Really Need to Retire? and How Entrepreneurs Should Fund Retirement on AmEx Open Forum. [via SPU]
Sam Glover has been writing about law practice technology, management, marketing, and other stuff on Lawyerist since 2007. He consults on appeals and motion practice in his solo practice. When he isn't blogging or lawyering, Sam drinks espresso and plays with fountain pens.
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“… struggling just to keep the lights on…”
If lawyers are in such predicament I shudder thinking what will come of the rest of us. Unless one has a huge number of dependents or other non-traditional commitments one should refrain from using such statements as “… put food on the table… ” or the one above.
I see you are unaware of the reality of lawyers’ salaries. Lawyers who work hard can make a decent living, but it’s not an easy way to get rich.
Further, just like most entrepreneurs, lawyers often have to tighten their belts in the early months or years of starting a practice. Some never get past that point, but struggle throughout their careers. But even those have to plan for retirement someday, or work until they drop.
Actually, I’m quite aware of the average lawyer’s salary as my wife is one. Even entry level public defenders make about 50K a year. And it’s extremely unlikely that one would stay at that income level for say, more than 5-7 years. I never said you can get rich off that, but it’s well above poverty line even for a family of four. Then again, we’re not talking about keeping up with the Joneses either. All I meant to say was that if an attorney (any specialty) is worried about putting food on the table or keeping the lights on it’s time he consider a change of profession.
You fail to take into account student loan payments, which eats into 50k quite rapidly, after taxes.
Good article Sam. Don’t see this mentioned on many websites that discuss small firm practice.