Aside from appointing a successor to your company or business, succession planning also includes planning for retirement. It is critical for you to understand how much money you will need to retire and whether or not you have enough to do so. Since most business owners have a significant portion of their total assets and wealth tired up in their businesses, it is important to properly plan for your business to fund all or a major portion of your retirement income. In relying on your business to find your retirement income, you need to assess your income needs, determine the steps needed to ensure your retirement capital is secure, and plan for valuing your business to meet your needs.
While most business owners invest in Registered Retirement Savings Plans (RRSPs) or company Registered Pension Plans (RPPs), other plans can be considered to fund retirement. An option for investment is an Individual Pension Plan (IPP). The main difference between an IPP and an RPP or RRSP is that IPPs have larger contribution options after 40 years old. Plus, IPP contributions are tax deductible and grow tax deferred.
For business owners, retirement issues can be complex. Therefore, you should speak with us to help you prepare from being an active business owner to a retiree. We can also educate you on the issues surrounding valuing and selling your business, dealing with tax-related concerns, addressing a business succession plan, extracting steady retirement income from your business without causing it to fail, and advising you on what retirement plans best suit your needs.