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You’re nearing retirement, and boy, that feels great! Your retirement comes after years of hard work and commitment to your business, and now you’ll finally have time to relax without worrying about running a company. Sounds ideal, doesn’t it? For some Canadians, retiring cold turkey is the perfect way to close one chapter of their life and enter in to the next. For others, the idea of moving from work right in to retirement is downright off-putting. When you transition to retirement, the process should excite you, so it’s important to make the change in a way that fits you!
Easing in to your retirement
Sometimes, the best way to retire from the business you worked hard to build is to make the transition slowly & strategically. Not only will you be able to continue playing a key role in your company, but you are able to continue earning income while you decide the terms and timeline of your retirement. As you gradually move away from working, consider these key points:
1. What role will you play in your business, long term?
Even upon retirement, you may choose to continue offering your support to the company in a consulting role. You’ll be able to earn income, set your own schedule and help shape the future of your company without direct involvement.
2. Do you have an exit strategy?
The best way to make the most out of your timeline into retirement is to have a well-structured exit strategy. This gives everyone involved a clear outline as to what to expect as you move away from the business and prepare to hand the reins to your successor.
3. What are your savings like?
Perhaps you’re choosing to continue a role in the business because your savings just simply are not what you’d like them to be in order to retire. Before you throw in the towel and work longer than necessary, it’s important to speak with a qualified financial advisor. With their help, you may be surprised to find your savings are larger than anticipated!
Retiring cold turkey? What you need to know:
Ready to jump right in to retirement head first? Way to go! However, before you make the decision to retire it’s important to make sure you’re ready. Consider these factors before diving in:
1. What are your long-term goals during retirement?
Retirement dreams look different for everyone, so it’s important to identify what you’d like to achieve (the big dreams) and balance those goals against your regular day-to-day life. This helps build a realistic lifestyle framework during retirement and helps your financial advisor ensure your savings can account for those costs.
2. Review your savings.
Before you make the decision, review your retirement savings. It’s absolutely necessary to do this to build a budget for yourself when you are no longer earning an income. Does your current portfolio cover your regular cost of living as well as unexpected costs? Tools like RRSPs, TFSAs, RRIFs and more can help you build a solid nest-egg but connect with your financial advisor first to help determine if now is the right time to retire.
3. Plan Ahead.
It’s impossible to know exactly what life will bring, but the best way to be prepared is to plan ahead. As you move closer to your retirement, you will want to make sure you’re able to make the most of your investment into your business, and leverage that into your savings. A qualified financial advisor can help you make the most of your business, so you can enjoy financial freedom upon retirement.
Retirement can be distinctly different from one person to the next, so whether you’re easing out or stopping “cold turkey” it’s important to be prepared. The more equipped you are, the more you’ll be able to truly enjoy your retired years. A well laid plan starts with a call to Darryl Smith of Synergy Life Financial. Darryl specializes in helping business owners leverage their company into their savings, so you can live without the financial burden of retirement. Call (705) 424-0562 today to review your plan and get retirement ready sooner than you might expect!
Related: Transitioning from Business Ownership to Retirement