How to Pay Yourself (and Save for Retirement) as a Business Owner
Many women who own businesses work tirelessly yet still feel unsure about how to pay themselves. Income often feels irregular or unpredictable which makes retirement planning feel out of reach.
A structured compensation system changes everything.
1. Start with a baseline salary
Your baseline salary should cover your non-negotiable living expenses. It creates stability in your personal life and helps you feel financially grounded.
2. Use distributions for extras and growth
Distributions are flexible funds and should not replace a consistent salary.
Use them for
• Extra savings
• Vacations
• Home improvements
• Debt payoff
• Investing in business growth
This separation prevents overspending and reduces emotional stress.
3. Automate tax savings
Business owners often juggle multiple responsibilities which makes tax planning easy to forget.
To reduce stress
• Use a separate tax account
• Save a percentage of every dollar earned
• Review your numbers quarterly with a CPA
This creates predictability and protects cash flow.
4. Build retirement into your business model
Even small contributions make a meaningful difference over time.
Your retirement options include
• Solo 401k for higher contributions
• SEP IRA for simplicity
• Roth IRA for tax free growth
• Traditional IRA for tax deductions
• Brokerage accounts for long term investing without limits
Your business should support your future not just your present.
5. Incorporate tax strategy into your pay structure
The right structure can significantly reduce your tax bill.
This may include
• Paying yourself W2 wages if you operate as an S Corp
• Using retirement contributions to lower taxable income
• Leveraging health insurance and HSA strategies
• Tracking legitimate business deductions
Intentional tax planning builds long term wealth.
6. Schedule regular pay increases
Your income should rise as the business grows.
Many women underpay themselves for years which limits long term wealth.
A raise schedule based on revenue or profit targets keeps your compensation aligned with the value you create.
A strong pay strategy reduces stress supports your lifestyle and helps you build meaningful long term retirement assets.
Paying yourself as a business owner does not have to feel confusing or inconsistent. When you build a pay structure with intention, you gain clarity in your household budget, confidence in your business decisions, and a real path to long term retirement growth.
This is how you shift from reacting to your income to directing it with purpose.
Your business should support your life, your security, and your future. With the right structure in place, you can build a business that pays you well now while creating wealth that lasts. If you want support creating a personalized pay and retirement strategy for your business, I am here to help you move forward with clarity confidence and control.
Investment advisory services offered through Kingsview Wealth Management, LLC (“KWM”), an SEC Registered Investment Adviser. Insurance products and services are offered and sold through Kingsview Trust and Insurance Services (“KTI”), by individually licensed and appointed insurance agents. KWM and KTI are subsidiaries of Kingsview Partners. KWM is an investment adviser registered with the Securities and Exchange Commission (“SEC”).
