Transitioning from Business Ownership to Retirement

Retirement can look different to every person. For some, they are eager to be done with work and can’t wait to have more time to enjoy some rest and relaxation, and for others, the idea of retiring from their careers can be simply overwhelming. After all, your career is very much a part of your identity; you have come to be known for your role as a business owner providing your services to the community, so transitioning into retirement may have you questioning who you will become or how your income will change. Take the tension out of your transition into retirement. When you’re prepared, moving in to retirement is easier than it looks!

Be prepared for a lifestyle change

After years of hard work and dedication to your business, transitioning into retirement may not sound like a simple task. You’re not alone if you’re one of the many business owners who are worried about what you’ll do with all that free time. How will you structure your days? After the initial excitement wears off, what does your day-to-day routine look like? Not only do you have to consider the financial aspect of retirement, you need to be ready for the change in lifestyle that comes with your new-found free time. Consider these tips make the adjustment easier & more enjoyable:

Find a new daily structure for yourself. Without the hectic work schedule you’re accustomed to, you may find it incredibly helpful AND enjoyable to create a new routine.

Set goals for yourself, even small ones. Build that shed you always put off, take a hike through the park, or try cooking that dish you’ve had your eye on; you’ll be amazed at what you can accomplish!

Try new things! It can be hard to fill all that free time that comes with retirement, but what better time to try a new hobby, make some new friends or volunteer around your community?

Make sure you’re financially ready

For many Canadians, one of the biggest factors in their decision to retire is their financial well-being. As a business owner, you have worked incredibly hard to build your company in to what it is, and you can enjoy the financial stability that comes along with it. When you retire, the biggest adjustment will likely be the change in your income. You may not be able to collect regular pay cheques, but that doesn’t mean you have to live on a shoe string budget!

Related: 5 Tips to Plan for Retirement in 10 Years or Less

Transitioning into retirement is easier, both financially and emotionally, when you know that your budget will afford you the life you want to live. How can you make sure you’re financially prepared?

Take advantage of tools like TFSAs or RRSPs to help you grow your wealth during your working years to provide you an income upon retirement.

Upon retirement, roll your RRSP into an RRIF (Registered Retirement Income Fund) to receive payments yearly without withdrawing the entire amount of your RRSP.

Consider an “encore” job. Just because you’re retired doesn’t mean you have to leave the work force. Many people find casual work to be a rewarding way to transition into retirement slowly and it’s a great way to supplement your income!

No matter what your feelings towards retirement may be, the most important thing you can do is be prepared. Retiring from the company you worked hard to build can be unnerving, but it doesn’t have to be stressful! It should be an enjoyable and exciting milestone in your life and making sure you’re well prepared makes the transition easy. Imagine how you’ll spend your time, set goals for yourself, and be sure to stay flexible in your plans.