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How to Build a Financial Nest Egg While Growing Your Startup Just a small amount each month can add up over time. Here's how to get started now.

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Building a business often means working around the clock for little to no pay, putting as much revenue as possible back into your business.

As important as those early sacrifices can be, it's also important to consider your personal future. Someday you'll likely want to retire, but startup founders don't usually have access to 401(k)s. It's up to you, as a business owner, to find a way to put money toward your retirement, whether you're a one-person operation or you're setting up retirement plans for your own team.

To find out more about investing for your future while also building a business, we spoke with Garrett Oakley, a Certified Public Accountant and CERTIFIED FINANCIAL PLANNER™ with Betterment, an online financial advisor whose customers include many entrepreneurs and their teams.

Here are Oakley's top three tips for entrepreneurs looking to build a nest egg while growing their business.

1. Save for your future first.

For entrepreneurs, the priority is always to build and grow the company. Whenever extra money comes in, it's tempting to only direct that revenue toward business expenses. Many entrepreneurs continue to invest in their businesses long after they've begun to achieve their earnings goals. Even once they're taking a salary, it can be difficult for them to direct extra money toward a retirement account.

As challenging as it can be on a limited budget, Oakley recommends setting at least a small amount of every paycheck aside. It can be a small amount, he says, but to make the most of your money over the long-term, he suggests investing your savings in a Traditional or Roth IRA.

An IRA is an individual account for retirement that is not associated with an employer. For those under the age of 50, the maximum limit to contribute to an IRA is $5,500 per year, but it's a solid option for entrepreneurs who want to save tax-efficiently and help grow their money more quickly. For example, with the average time from startup to IPO being in the range of 11 years, maxing out a Traditional or Roth IRA over the same time period could build your nest egg to around $78,000, assuming a 5 percent rate of return.

"It's a way to start building those earmarks for retirement," Oakley says. "If you're just putting it in a savings account, it's pretty liquid. You can pull it out and sometimes if cash is tight, that might be the first place you go. With an IRA, it's probably not going to be the first place because you'd be giving up the tax advantages an IRA affords. You don't want to touch those dollars unless you absolutely have to, especially since withdrawing from an IRA involves penalties."

2. Consider a SEP IRA.

To set more money aside for retirement, entrepreneurs could look into setting up a retirement plan for the business. Especially if you want to save more than the $5,500 IRA contribution limit, Oakley suggests thinking about creating a SEP IRA plan, which benefits you, the owner, as well as your employees.

SEP IRA stands for Simplified Employee Pension-Individual Retirement Account, which is geared toward the unique retirement savings needs of self-employed workers. This type of IRA is similar to a Traditional IRA except that entrepreneurs can extend the contribution amount they make. Traditional IRAs have a $5,500 limit, which can be stifling for professionals who want to contribute more. With a SEP-IRA, you can contribute up to 25 percent of your income, with a contribution cap of $54,000 for the 2017 tax year.

"It comes down to, you can put in much more with the SEP which is 25 percent of net earnings or really 20 percent for self-employed," Oakley says. "The SEP also allows a lot more time. Entrepreneurs who filed an extension on their 2016 taxes, for example, could make a 2016 SEP IRA contribution by the October 15th 2017 deadline."

3. Set up automatic deposit.

From one month to the next, it can be difficult to maintain a commitment to save. By setting funds up to transfer to your retirement savings account automatically, you'll be able to resist the temptation to skip a month.

These accounts normally rely on transferring part of a regular paycheck, but since entrepreneurs often forego regular paychecks, this isn't always a viable option. One innovation that works well for entrepreneurs is a service like Betterment's Smart Deposit, which lets the account owner set a ceiling on a bank account. Once that account reaches that preset maximum, Smart Deposit begins transferring the excess to an investment account. Another option is Auto Deposit, which allows entrepreneurs to designate a set amount each week or month to automatically go toward their retirement.

"It doesn't have to be invested aggressively," Oakley says of the investment account. "It could be a safety net. It's just trying to earn a little bit more than the checking account would."

Setting money aside for later in life can be challenging for hard-working business owners. But just a small amount each month can add up over time, especially if you save on a tax-deferred basis, and put it on autopilot. Decades later, when it's time for retirement, the goal is to have enough money in the chosen account to help you achieve goals like traveling or simply resting and enjoying your golden years.

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