How to Retire the Right Way

By Randall Orser | Personal Income Tax

An Ipsos poll stated that 55% of respondents indicated they planned to spend their retirement years travelling, while 54% indicated they wanted to spend more time with their family. Are you a small business owner harboring those same retirement dream? If so, you need to start thinking long and hard about how you plan to retire from your company. Retiring from a small business is not quit the same as retiring from that 9 to 5 job. You need to figure out how your retirement plans will impact your business, and how you will make a graceful exit from it. The following planning tips will help you retire the right way from your business.

Succession Planning

The best move that you can make on your retirement plans is to come up with a succession plan way ahead of when you eventually plan to retire. The earlier you start thinking about training your successor, the quicker you can start imparting your knowledge to someone on your team. When hiring employees have management training in mind, focus on helping team members learn to do your job in your absence, and do whatever you can to build a team that is invincible. Are you planning on selling your small business as part of your succession plan? Having a strong team in place will make selling the business that much easier.

Tax Planning

For small business owners who plan on retiring someday, the critical thing is advanced tax planning. You need to know how the tax laws will impact your retirement plans if you don’t want to get hit with unpleasant tax penalties when you retire. Find a good accountant and financial planner that specialize in retirement, so you know the significance of everything from a diversified retirement savings plan to self-directed retirement funds and capital gains taxes. When you adopt a ‘big picture’ mentality in regard to your tax planning, making your retirement dreams a reality becomes an easier goal to achieve.

Retirement Age Planning

Have you determined an age when you plan to retire? As a small business owner, you need to figure that out, however, that doesn’t mean you have to retire at 65, it can be before or after that. Find someone who is a certified retirement specialist to better understand your options. With careful financial planning, you could retire early, maybe 45, 50 or 55. You might even be able to develop a retirement plan that allows you to hand over control of your small business while retaining ownership rights. Your retirement doesn’t have to begin at 65, and you may find it amazing what options you have to explore.

For a sound financial future as a small business owner, it’s critical that you start retirement planning. Once you realize how many events can impact your future and small business (health, technology, etc.), you start to see the importance of developing a long-term retirement plan for your company. 

 

Follow

About the Author

President/CEO Number Crunchers® Accounting Inc. Learn how to just say stuff it to this bookkeeping thing with our 'Just Say: "Stuff It" To Bookkeeping program.