You’ve built a business and opened a retirement account—now it’s time to make those savings work for you. Before you choose investments, take a moment to plan. A clear strategy can help you invest with confidence and keep your long-term goals on track.
“Business owners wear a lot of hats," says Kenny Davin, vice president and branch leader of Fidelity Investments in Fort Lauderdale, Florida. "They’re responsible for their own retirement, health care, and benefits—things that are often automated in corporate jobs. So they have to be more intentional and strategic about everything.”
Step 1: Start with a plan
A financial plan can help you map out everything from personal cash flow and insurance needs to a strategy for managing taxes and retirement.
“Some owners go all-in on the business without a retirement plan, which can backfire,” Davin explains. “There are many plan types—SEP IRAs, SIMPLE IRAs, solo 401(k)s, defined benefit plans, and more. It’s complex, so people often delay or avoid it.”
Planning also means thinking beyond the business. What happens when you sell or wind down? “Hope is not a plan,” Davin says. “You need an exit strategy—whether it’s selling, winding down, or passing it on with preparation. Otherwise, you risk losing the value you’ve built.”
And don’t forget emergency funds and a budget—for both personal and business needs. Understanding your personal cash flow outside of the business can help ease the transition to retirement. Davin recalls a client who sold a business for millions but suddenly felt insecure because they’d never lived on a budget. “Your business might feel like your safety net, but once it’s gone, you’re on a fixed income. Planning is critical—not just for the business, but for your life after the business.”
Step 2: Know your account type
Before you start investing, it’s important to understand the type of account you’re using. Each one has its own rules around contributions, taxes, and how you invest—but the core principles stay the same. Here are some options Fidelity offers:
- SEP IRA. Often used by self-employed individuals and small-business owners. It allows for relatively high contributions, which are typically tax-deductible. The SEP IRA only allows employer contributions; employees don’t have the option to make their own contributions. Investments have tax-deferred growth potential, meaning you’ll pay taxes when you withdraw the money in retirement.
- SIMPLE IRA. Designed for businesses with 100 or fewer employees. Employers are required to contribute, and employees can contribute too. Contributions are made pre-tax and with tax-deferred growth potential.
- Solo 401(k). Available to self-employed individuals with no employees (other than a spouse). It offers high contribution limits and more flexibility—including the option to make Roth contributions, which are taxed up front but can be withdrawn tax-free in retirement. That gives you a choice: take the tax break now or potentially enjoy tax-free income later.
Understanding whether your account supports traditional (pre-tax), or Roth (after-tax) contributions can help you make smarter decisions based on your current income, expected retirement tax bracket, and overall strategy.
For more information on the accounts Fidelity offers for business owners, read: Self-employed and small-business retirement plans. The page also includes a tool to help small-business owners choose the most appropriate retirement account type based on their situation: Plan Selector
Step 3: Build your investment strategy
Building an investment strategy is a bit like planning a balanced meal. You don’t need fancy ingredients—just an appropriate mix to support your long-term financial health.
Asset allocation
This is your overall blend of investments—typically stocks, bonds, and cash. The factors to consider include:
- Your time frame. How long until you’ll need the money? If retirement is still years away, you may be able to take on more risk in exchange for more growth potential.
- Your comfort with risk. Some people are fine riding out market ups and downs. Others prefer a steadier path.
- Your financial picture. Do you have other savings or income sources? Will this account play a big role in your retirement? These details help shape how aggressive or conservative your strategy should be.
In general, the longer your time frame and the more comfortable you are with risk, the more you might lean toward stocks over less risky investment choices. But even if retirement is around the corner, growth still matters—especially if you’ll be retired for 20 or 30 years.
So once you’ve figured out your overall mix—your asset allocation—the next step is to think about how to spread your investments within those categories. That’s where diversification comes in.
Read Fidelity Viewpoints: Asset allocation: What it is and how to develop one
Diversification
Diversification is one of those classic investing ideas that’s stuck around for a very good reason. It’s about not putting all your eggs in one basket—spreading your money across different types of investments so you’re not too exposed to the risks of any single investment.
That might mean owning a mix of asset classes, like stocks for growth potential, bonds for stability, and cash or short-term investments for flexibility. You can also diversify within those categories—by investing in different industries, company sizes, or regions around the world. The goal isn’t to avoid losses entirely, but to help your portfolio stay steadier through market ups and downs.
Over time, this kind of balance can make it easier to stick with your plan, even when headlines get noisy or markets get bumpy. But remember, diversification and asset allocation do not ensure a profit or guarantee against loss.
Read Fidelity Viewpoints: Diversification: Why and how to do it
Rebalancing
Even a well-built portfolio can drift over time. Markets move, some investments grow more than others, and before you know it, your mix may look very different from what you originally planned.
Rebalancing is how you bring things back in line. It means checking in on your portfolio and adjusting it as needed, which might mean selling a little of what’s grown too much and buying more of what’s lagged, to get back to your target mix. It’s not about chasing performance; it’s about keeping your strategy on the right track.
You don’t have to rebalance constantly. Once or twice a year can be often enough, or you can set up automatic rebalancing if your account allows it. The key is to stay intentional, so your portfolio keeps reflecting your goals—not just the latest market moves.
Read Fidelity Viewpoints: Rebalancing your portfolio
Step 4: Pick your investments
This is the part where a lot of people feel stuck. But you don’t need to be an expert to get started. There are a few common paths, and the right one depends on your objectives, investing experience and knowledge, and other factors specific to your situation.
- Individual stocks and bonds: In order to build a diversified mix of individual stocks, you'll need to evaluate possibly dozens of companies to find stocks to buy. Creating a written investment policy that details the criteria for buying and keeping investments can help keep your strategy coherent from year to year. As time goes on, it's important to keep tabs on performance. It can sometimes make sense to add bonds to your investment mix, which come with their own research requirements. Building and maintaining a mix with individual securities is doable—but not always practical if you’re busy running a business or juggling other priorities. To learn more, read Fidelity Viewpoints: 5 stock research tools and Bonds or bond funds
- Mutual funds and ETFs: These are professionally managed options that bundle together lots of investments—stocks, bonds, or both. Mutual funds trade once a day, while ETFs trade throughout the day like stocks. Both can offer built-in diversification, which helps spread out risk.
- Actively managed funds aim to beat the market.
- Passively managed funds track market indexes like the S&P 500® or the Bloomberg US Aggregate Bond Index.
- Target date funds: Built around the fund’s expected retirement year, these adjust over time—typically starting with a growth-focused mix and gradually shifting toward more conservative investments. When choosing target date funds, investors often choose the target retirement year that most closely matches their own planned retirement date.
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You can even mix and match. Just be sure to keep an eye on fees, expenses, and how everything fits together in your overall strategy. You might also consider professional management. You can work with a financial professional or use a managed account. Professionally managed portfolios are generally made up of individual securities that can be built based on your goals and risk tolerance. Fidelity offers professional management for some types of small-business accounts. Consider speaking with a Fidelity professional for more details.
If you’re not sure where to start, Fidelity offers a few tools that can help.
- Model portfolios to get ideas for building your mix
- ETF Portfolio Builder to create a diversified strategy based on your preferences
- Planning & Guidance Center to get investments and strategy suggestions.
Step 5: Make the investment
Once you have an idea of what you’d like to invest in, you just need to implement your strategy. For most accounts, that means choosing your investments, deciding how much to put in, and setting up automatic contributions if that’s an option.
If you’re using a Solo 401(k), you may be able to invest through your payroll setup. With IRAs or SEP IRAs, you’ll typically log in and make your investment selections manually.
Tip: You don’t need to get everything perfect on day one. The key is to get started. You can always refine your strategy over time. One of the keys to success is not just investing but the combination of continuous, consistent contributions. Making your savings automatic with payroll deduction or automatic transfers from your bank can help ensure that you’re always saving no matter what’s going on in the market.
Read Fidelity Viewpoints: Help your money grow with automation
Step 6: Keep tabs—but don’t obsess
You’ve taken the leap and built a strategy. Now it’s about staying the course. Markets may rise and fall, but what matters most is keeping your focus on the long term.
Monitoring your plan can help you understand your progress. Check in on your financial plan regularly, or when something significant changes in your business or financial life. Revisit your mix, rebalance if needed, and make sure your investments still align with your goals. You don’t need to monitor every market move. In fact, stepping back from the day-to-day noise can help you make better decisions.
And if you ever want a second opinion or a fresh perspective, Fidelity has tools, resources, and professionals ready to help—whether you’re refining your strategy or planning your next move.