At some point, retirement will be in your future. As a business owner, retirement is not as easy as choosing to end your working years to embark on a new journey. You must worry about what happens to your business, your finances and your family when you decide to leave your company. No matter how near or far it may be, have you considered all the factors that will affect your personal AND financial well-being during your retired years? Here are 10 things every business owner should review and take into consideration while planning for retirement.
10. What will happen to your business?
Transitioning from business ownership to retirement is a process that requires a few steps to be taken and decisions to be made. First and foremost, you must decide where your business will be upon retirement? Do you have an exit strategy in place? Will you sell, shut down or pass on your business to a successor? The path you choose for your business will directly impact your retirement plans. Carefully consider every option and speak with a financial advisor in order to firmly protect your finances.
9. Do you have a buy-sell plan in place?
Business ownership doesn’t just come in the form of sole proprietorship. If your business was built on a partnership, it’s important to have an agreement in place to protect yourself and your family, should anything happen to your business associate. A buy-sell agreement would buy out the survivors shares of the company at a predetermined price, to be paid by the insurance company.
8. Will you continue working in a casual or a part-time role?
Retirement isn’t as easy as quitting cold turkey. For many retiree’s easing into total retirement is the preferred choice. If you find fulfillment from your career or working in general, consider reducing your role at work to part-time hours or setting yourself up in an advisory role while allowing someone else to take the lead for the day-to-day tasks. You’ll be able to continue earning an income and contributing to your savings, while still allowing yourself ample time to enjoy the freedom that comes with retirement.
7. Where will your income come from?
Working casually or in a part-time role is a great way to supplement your retirement income. However, if you choose to retire from work completely, where will your income come from? It’s important to know how you plan to fund your golden years without the steady income you have while working.
6. Other than working, how will you spend your free time?
Knowing how you plan to spend your free time will help you determine your daily living budget to create a financial savings plan that covers your retired years. Spending your free time relaxing vs. living a life of big bucket list adventures will need drastically different savings plans.
5. How much do you need to spend each month?
Take a look at your current financial obligations such as bills, mortgages and recurring payments to determine what you’ll need to spend monthly. Once you’ve determined this, you can start to account for additional spending like trips, family gatherings, etc.
4. Have you anticipated the cost of health care?
The unfortunate fact of life is, as we age, our health care requirements change and often increase. Although as Canadians we enjoy the privilege of public health care it does not cover every expense you could incur. It’s important to speak with a financial advisor who understands the financial needs of retirement as well as aging in order to develop a financial plan that accounts for extra health care costs.
3. Do you have adequate insurance coverage?
Knowing that health care needs increase as we age, it’s important to review your insurance plans to account for this. Finding an insurance plan that aligns with your long-term plans for retirement can help ease the cost of any expenses you might face down the road.
2. What’s the state of your estate plan?
Protecting your finances with a clear estate plan can give you peace of mind financially and emotionally both as an individual and as the provider of your family. Not only will you be protecting yourself, but you will also protect and ensure benefit for your family in the future.
1. Finally, how do you feel about the idea of retirement?
Retirement is meant to be a milestone to look forward to! If the idea of retiring causes you stress, it’s important to talk to a financial advisor who can help you evaluate your goals and savings plans to get you on track.
Imagine a retirement where your free time is spent doing what you love instead of worrying about your budget. Talk to Darryl Smith of Synergy Life Financial today by giving him a call at (705) 434-0562. It’s never too early to create a retirement plan to help you transition from business ownership to balmy vacations on a beach (or wherever you imagine yourself). His professional and knowledgeable advice along with his simple process to retirement planning can help you retire from your business in 10 years or possibly even less. Retire with financial health and wealth, with a plan based on experience and proven financial planning strategies.