My family comes from Romania, and like most Eastern bloc countries, the brush with communism left many people to rely on the government for their retirement. There is also a strong family support system, which is common throughout the world, but this burdens the children with taking care of the elderly. This mindset takes a back seat in the Western world, where people expect not only to live comfortably in retirement but also to leave something for their descendants.

The current labor market is also drastically different than the one my grandparents faced. I do not work long hours in a field or factory. Quite the opposite: I suffer from the adverse side effects of a sedentary life, even spending a significant portion of my wages to overcome the long-term effects of sitting too much, most recently by purchasing an electric sit-stand desk. Given the new labor environment we find ourselves in, there are some problems to consider and a plethora of ways to overcome them.

A prominent problem for business owners is how to save for retirement. The corporate pension plan is long gone, and anyone still drawing on one should consider themselves lucky. Government pension plans are on questionable footing and the younger generation doesn’t plan on social security providing a comfortable retirement. That leaves 401(k) to bridge the woefully large gap.

According to (, the average 401(k) balance for 60 to 69-year-olds in 2018 was about $195,000 . That number is hardly enough for a comfortable retirement. There are many reasons for this shortfall, including market fluctuations, underfunding of employees, and an overreliance on social security. The truth, however, is that the transition from pensions to 401(k) plans happened with minimal education and even less behavioral understanding.

One of the biggest drawbacks of the 401(k) is that people are just not diligent enough to sufficiently save for retirement. On top of that, the emotional reaction to market swings makes people buy high and sell low, instead of the other way around. Others take the conservative approach and rely on an investment strategy that is so risk-averse it is unlikely to provide any real gains in the long term.

So how can business owners secure their retirement? First, as a business owner, you have a few advantages over corporate employees. The value and equity you build in your business is a form of long-term savings that will ideally provide a lifetime of payout. However, having all your eggs in one basket is ill-advised, thus diversification is crucial. Here are six ways to help secure your retirement:

• Save 20% of your income. Saving 20% of your income seems to be the magic number that many people have come to rely on. I think it is a great number to start with; after all, you want to still be able to enjoy life and the fruits of your labor.
• Diversify your holdings. For many business owners, most (if not all) of their wealth is tied up in their own business. This is not bad in itself as it gives you a high degree of control, but there are always uncontrollable forces that can, but hopefully won’t, cause your business to fail. The same is also true for people who are house poor, with all their money tied up in one property. You must develop a strategy to shift your wealth from your business to other investments.
• Invest in the stock market. The stock market is volatile: it will go up and down, but in the long term it is by far one of the most secure and lucrative investments you can make. The key to investing in the stock market, as with most investments, is diversification. One company might go bankrupt, but if all companies go bankrupt you would have bigger problems than losing your money.
• Asia and Africa are where the growth will be. Many recent statistics point to Asia and Africa as generating the most growth in the global economy in the decades to come. The US, Europe, and all Level 4 developed countries will grow but obviously not as drastically. For a long-term strategy, betting on this inevitable rise will make you wealthy. There is obviously higher risk but that is mitigated by time, and, of course, diversification.
• Seek education and financial advice. With so much information available, it is hard to know what to focus on or who to believe. To succeed, you must educate yourself but also seek guidance from licensed professionals. Ensure you always do your due diligence when investing to understand the risks involved.
• Take advantage of tax-deferred accounts. Compound interest and tax-deferred accounts are your best friends in retirement planning. As a business owner you have the option to optimize your retirement planning. You can set up a solo 401(k), SEP IRA, or even some other specialized retirement plans. Never pay tax on gains in your long-term investments—it can cost you millions if you do.

As business owners, we don’t want to rely on the government for our retirement, we obviously don’t have an employer to rely on, and putting that burden on our children seems irresponsible. Thus, we must take direct responsibility. I would also argue that we must take responsibility for our employees’ retirements, although few business owners share that sentiment. There are numerous steps you can take to secure your retirement, but the essential ones are to Save! Save! Save! And Diversify! Diversify! Diversify!