Retirement planning for business owners – In a nutshell, expert advice from Andrew Neligan from Neligan FinancialClick here to view the transcript
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.