Retirement planning for business owners – In a nutshell

Updated : Aug 31, 2019 in Articles

Retirement planning for business owners – In a nutshell


Retirement Planning for business owners….In
a nutshell As a business owner you will have worked hard
to establish a successful business. There will, however, come a point when you (or perhaps
your other half) decide it is time to stop. The problem is many don’t plan for this
event and haven’t done enough to ensure retirement is full of opportunity and not
spent worrying about money. Did you know that, according to an Open University
Survey, more than a third of SME owners aged over 65 still do not know when they will retire
and nearly 30% expect to struggle in retirement? Yet with a bit of pre-planning retirement
can be a time of freedom and opportunity rather than a worrisome struggle. The best place to start is by deciding what
you want your ideal future to look like: What will you be doing, with whom and by when?
What will the cost of this lifestyle be? If your plan is to sell the business are you
putting all your eggs in one basket? Your retirement happiness is at risk from market
forces you can’t control. Maybe your intention is to maintain ownership
but step away from the daily responsibilities. What would happen to you if your successors
don’t have the same skills, knowledge or passion you have? It is better to reduce these risks by moving
wealth from your business to your personal finances. And the good news is the Government
incentivises you to do it: Did you know that in 2016 a couple could enjoy
£56,200 a year without tax? And that’s before tax free income from ISAs and other
tax advantaged investments Furthermore, a pension contribution paid by
the company reduces corporation tax, grows tax free, provides a 25% tax free payment
and avoids Inheritance Tax. Finally, you could protect against the risk
of death, illness or accident to yourself and business partners so catastrophes don’t
also have serious financial consequences. So, with pre-planning and taking some simple
actions you can be confident of a retirement full of experiences and without money worries.

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