SIX TIPS FOR SMALL BUSINESS OWNERS TO RETIRE COMFORTABLY

Written on the 28 April 2015

SIX TIPS FOR SMALL BUSINESS OWNERS TO RETIRE COMFORTABLY

SMALL business owners must rethink their retirement strategy to avoid facing financial hardship down the track, according to Opening Gates.

The business strategist says a growing rate of Australians are planning their retirement around over-valued businesses and facing a longer time in the workforce as a result.

According to the 2015 Intergenerational Report, workplace participation rates for employees aged 65 years and older is expected to increase to 17.3 per cent by 2055.

Opening Gates says another study shows 33 per cent of small business owners will rely on the sale of their business to fund retirement.

Founder Judy Reynolds says the current economic climate is challenging small business owners and the traditional nest egg.

"Increasingly, business owners relying on the sale of their business to fund their retirement are discovering that the market is not what it used to be, leaving them disappointed and unprepared," Reynolds says.

"The key to improving this situation is starting the planning process earlier, much earlier than you anticipate and see a professional to help guide you.

"Set your intentions for life, including when you plan to retire, and then design a wealth plan to fund those retirement years.

"This is particularly pertinent considering two in five pre-retirees and almost half of retirees admit they did not start planning or saving early enough."

 

Reynolds shares her top tips for preparing for retirement:

1. Start planning earlier, much earlier that you anticipate. Set your intentions for your life, which includes your retirement. Knowing what kind of lifestyle you want when you retire will help you determine how much capital you will need to fund it.

2. When making decisions in your life and in business, consider how they will impact your intentions for your retirement and adapt accordingly. Major life events have affected almost three quarters (74 per cent) of pre-retirees retirement savings, this includes paying off a mortgage (36 per cent) or starting a family (20 per cent).

3. Design a more profitable, future-ready business, which will enable you to be in a better financial position to retire at some future date (this includes looking at your planning, systems, leadership, team, innovation etc.) This is a business that enables you to live the life you aspire to and make the contribution you desire to by maximising profitability over the entire life of the business.

4. Review these intentions/plans regularly and amend where necessary, particularly in light of current economic circumstances and changes in personal circumstances.

5. Diversify. Do not rely solely on the sale of your business to fund your retirement because you may find it's not worth what you think it is.

6. Do not rely on government pensions. Policy changes down the track may affect you.


Latest News

NEW CLASS OF EDUCATION NURTURES ENTREPRENEURS OF TOMORROW

THE rise in youth unemployment has affirmed the importance of entrepreneurship education, and south-east Queenslan...

DUET GROUP SUBJECT OF $7.3 BILLION TAKEOVER OFFER

HONG Kong's Cheung Kong Infrastructure has launched a $7.3 billion cash bid for one of Australia's largest en...

G8 SHARES BUOYED BY FORECAST PROFIT RECOVERY

CHILDCARE centre operator G8 Education (ASX:GEM) has revealed it is on track to post a pre-tax profit of up to $16...

BELLAMY'S FINDS EXPORTING BABY FORMULA INTO CHINA IS NO CHILD'S PLAY

BELLAMY'S (ASX: BAL) shares have suffered a 40 per cent drop in value today after the company hit a regulatory...

Related News

JB HI-FI IS THE GOOD GUY IN $870 MILLION ACQUISITION

ELECTRONICS giant JB Hi-Fi has formally completed its $870 million acquisition of home appliance chain The Good Gu...

ACCC ACTS AGAINST MERITON'S RIGGED REVIEWS

MERITON Property Services is under fire from Australia's main consumer watchdog, after it allegedly engaged in mi...

ACCC FIRES WARNING SHOT TO IVF PROVIDERS

IVF clinics have been put on notice by consumer watchdog, the Australian Competition and Consumer Commission (ACCC...

BIG W CEO QUITS AFTER 11 MONTHS

SALLY MacDonald has resigned as chief executive of BIG W ending her tenure at the helm of the struggling discount ...

Contact us

Email News Update Sign Up Contact Details

Subscribe to our mailing list

* indicates required
Email Format

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter