For over 20 years I have been advising clients on the transition
to retirement and what matters they need to address both personally
and in their businesses. I am now about to run a seminar on
"10 years to Retirement" and I thought, that's me. I
am part of the audience. Like most business owners, when I look at
my business I am proud of what I am a part of and it will be
difficult to depart from it. At the same time it is important to
plan for this to occur. Some of these things need to be considered
now rather than later.
Retirement shouldn't be a spur of the moment decision for
anyone. Every individual has individual circumstances to consider
about when is the right time for them to move on from their working
life into the next stage. This is both a financial decision and a
personal one. Is your financial position secure enough for you to
stop working? What about you and your family? Have you decided how
you will spend your time?
For someone who owns their own business, the issue becomes more
complicated. It is not just about how you will manage your personal
finances, it is also about how you will ensure that your business
is ready for you to leave. It may be that you have business
partners that will continue on without you, or you may wish to sell
your business to a new owner, or transfer it to your children. You
may even decide that you will just "shut up shop".
Whatever you decide, there are financial and legal consequences of
your decision and the process will be much smoother if a plan is
put in place well in advance.
Things to consider for your transition to retirement are:
Do you have co-owners and if so do you have agreements in place
with your co-owners as to what will happen if one of you wishes to
leave? Will they buy you out? Could they afford to? How much will
they pay? How do you work out what they will pay? When will they
pay? Can you sell your share to a third party? Can the business
operate without you or do you need to train a replacement?
Is the Business valuable without you, or are you the key person
with irreplaceable knowledge and connections?
Is your business set up to run smoothly even if you are not
there? Have you got the relevant documents in place for your
business, including employment contracts, premises leases, supply
agreements, insurances? Having these items in place can make your
business more valuable, and make it easier to find a purchaser if
you wish to sell it.
Have you talked to your lawyer, financial planner and
accountant? It is important to seek advice before taking any action
to ensure you are reducing any risk to yourself and the business,
as well as doing things in a way which will minimise any tax
Have you planned for the worst? Unfortunately, bad things can
happen prior to getting to retirement, so it is important to have
all your personal documentation in place, including your Will,
Power of Attorney and Enduring Guardianship
All these things take time, so it is essential to start
considering a transition to retirement earlier rather than later,
and seek advice. I know I am seeking advice. If you are a business
owner, you may find our upcoming seminar "10 Years to
Retirement", co-hosted by WSC Group Accountants, a valuable
information session. See more at:
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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