Guest post by Andrew Neligan of Neligan Financial
I established Neligan Financial in 2016 having moved back to this wonderful county after 20 years away (it pulls you back sooner or later!).
The purpose of the firm is to enable Devon’s business owners to live the retirement they wish without money worries. In practice this involves working closely with my clients to help uncover what really matters in life, working out if they are on course to be able to do that when they wish to and, if not, formulating and implementing the actions to make it achievable.
* What will happen to my wife and children if I die or can’t work?
* What will happen to my business if my business partners die or have an accident?
* How much wealth do I need to accumulate so I can stop working?
* When can I afford to start phasing into retirement?
* How can I use my business to help achieve my personal goals?
* How can I legitimately minimise the tax I pay?
The problem is you think you have time
The single biggest regret I hear from people as they near their intended retirement age is they should have started preparing for it sooner. This is either because they haven’t built up enough wealth to fund their ideal retirement lifestyle and will have to “cut their cloth accordingly” or they’ve worked out that they will have more than enough so could have stopped working sooner. Not only that but the Government is going to be the major beneficiary of all the money they’ve accrued.
“My business is my pension”
I’ve also heard people say they’ll either sell their business or step away but continue to receive dividends throughout their retirement.
Either may be possible but it is also a high risk strategy for a time of life when risk will want to be reduced and control increased.
Consider all the business that have closed over the past five to ten years. It may have been a result of the Credit Crunch, a new competitor moving in or a technological change making your product or service less competitive. How would this affect you and your family if it were to happen to you when you retire?
If your plan is to leave the day to day running of the company to the next generation or a management team how can you be sure that they have the same passion, drive and abilities that made it successful in the first place.
What is your business worth?
Consider this: if someone advised you to take that capital value of your business and invest it in a small, illiquid company would you do it or run a mile? My guess it would be the latter but you are taking this decision every day with your business that you have poured blood, sweat and tears into. Would you really want to risk your retirement on it too?
Your business is a great way to increase your wealth but there are also many opportunities to reduce the personal risks you are exposed to and minimise the tax you pay now and in retirement.
The key is to ensure your business and personal objectives are aligned so that you are in control of when you stop rather than having your business decide when you can.
If you would like to discuss how you can use your business and live your ideal retirement without money worries, please contact me. First meetings are at my cost and without obligation to proceed with my services.
Neligan Financial Limited is an appointed representative of Best Practice IFA Group Limited which is authorised and regulated by the Financial Conduct Authority. Company registered in England number 09948729. Registered office: 28 Alexandra Terrace, Exmouth, Devon, EX8 1BD