So why do so many of them fail to plan their own retirements? With studies suggesting that only 1 in 3 directors and business owners has a comprehensive retirement plan in place â and that only 1 in 2 of those with a plan see that plan succeed â there is clearly a need for more directors to plan properly. Why do so many of them fail to do so?
Over the years weâve probably been given half a dozen answers when weâve asked that question. As youâll see, none of them really hold waterâŚ
âI havenât got time.â The simple fact is that no one ever has time. And yet planning your retirement is one of the most important jobs youâll ever do. As the old saying goes, a director or owner of a small business will either walk out of his business or be carried out of it. Assuming your preferred course of action is the former, then there needs to be enough money waiting when you do eventually walk out â and the only way you can make sure of that is to plan for it.
âItâs too early/too late.â Itâs not too early if youâre in your twenties or thirties and it isnât too late if youâre in your fifties or sixties. We know that in your twenties and thirties youâre working all the hours in the day to build your business: but trust me, you will get older â rather more quickly than you think. And yes, of course itâs easier to achieve savings targets if you have more time but the simple fact is that there is need for financial planning at all ages, as personal circumstances and financial planning goals are always changing.
âIâm going to keep working.â There seems to be a trend amongst some business owners and directors at the moment to declare that theyâll never stop working, that nothing is as satisfying as working so why would you ever want to stop? Unfortunately your health, your family and your competitors may eventually play a part in this decision. In our experience, there comes a time for every entrepreneur and director when âenough is enoughâ and when that time comes it needs to have been planned for.
âItâs boring/not worth it.â In some ways this is one of the easiest objections to understand. Many directors and entrepreneurs â especially younger ones â have seen their own parents dutifully save for retirement and then not be very well off when they do finish work. Unfortunately, everyone now working faces a very simple fact: the population is getting older and the Government simply wonât be able to fund the retirement you want.
âThe numbers are too big/too frightening.â Sadly, this is a reflection of proper financial planning. If weâre going to plan for the retirement you really want then the numbers will be big â and they will be challenging. But there is no point in us preparing a financial plan which provides less than you want â and itâs surprising what can be achieved if you save consistently and keep your savings and investments under regular review.
âMy business is my pension.â Despite the fact that virtually no businesses are sold at exactly the right time for exactly the right amount of money, many directors and business owners still say this. Of course the answer is to build your business but you also need to build cash outside your business as well. Thatâs what gives you choice and control and, ultimately, thatâs what allows you to dictate the timing and the quality of your retirement.
Weâre always happy to talk about a clientâs retirement planning. Directors and business owners can plan for their retirement very tax efficiently â and they enjoy flexibility which certainly isnât available to normal employees. It makes sense to explore the options: we promise you that it isnât too late and weâll do our best not to be boring!
