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Family business retirement & succession: A financial planning perspective

After working with family businesses for many years, one of the things that we find stands out is being able to identify what your ideal life looks like and what is the best path to take to move forward. Here are FBA Accredited Advisor, Simon Clifford's top tips to prepare you for a smooth transition from your business into retirement.

Don’t keep it a secret or leave it to the last minute

Thinking about retirement can be a daunting task because it involves such a significant change in your life. Not only are you letting go of a business that you’ve spent most of your life building, but you’re also letting go of a large part of your personal identity.

As creatures of habit, facing a significant change to your routine can potentially leave you feeling lost. Preparing yourself well in advance and telling those close to you can help with the process.

Getting the balance right of who knows, can assist you to put in place the bricks and mortar for a smooth transition. Understanding your own needs, goals and objectives for creating a retirement lifestyle that works for you is paramount.

Dare to dream

Map out your ideal life over the next 3, 5 & 10 years….and beyond.

Before we start anything, the first thing we do as financial planners is a ‘whiteboard’ session with you to explore what matters to you about life, your family, your business. We want to get to know you as individuals and understand what makes you tick and listen to the questions that are often going on in your mind, but you may have been too afraid to ask… Are you living your ideal life?

Things to start thinking about for your retirement plan.

  • Will you have enough money to retire?

  • No one wants to take a pay cut in retirement. Make sure you know your expenses and have a budget

  • Do you have enough money to do the things you've wanted to do when you retire?

  • Holidays: Be specific. Where to, for how long and how much money do you need?

  • Where do you want to live? Decide whether you will downsize or sea change/tree change

  • Do you need a new car or want to renovate the home?

  • Are there any family expenses such as weddings, leg up, grandkids, school fees or gifts?

  • Will you be selling certain assets?

  • What are the legal and tax consequences?

  • Superannuation (so much to cover), business concessions, shareholdings, the list goes on

  • Do you need to keep working? If you'd like to keep working, what are your options?

  • This is where communicating with family early on in the piece can help for a smooth transition.

  • What will you do with your spare time? What do you need to do to make sure your family is ok if something happens to you?

  • We don’t want your personal relationship to suffer because one, or both of you, don’t have a plan

  • Are your assets and investments structured appropriately?

Understanding all the above will help you gain an understanding as to how much you need, if you have enough and how long will it last.

Understand your investment style

What is your investment strategy and how much risk are you comfortable with? This has always been a significant cornerstone to retirement plans, however, is particularly significant now given low interest rates are here for a while. Working with your accountant and financial planner will help identify the opportunities, structures and strategies necessary to help navigate what can be a complicated financial pathway.

Of course, you’ll want to make sure the business is in good hands and that the success of the business transition goes smoothly. That’s where you’ll work with your trusted group of professionals, but knowing what’s important for you individually, or as a couple, will help with getting you ready for that next step.

Seeking professional advice to help you during what should be one of the most exciting times in your life and let’s face it, what you’ve been working for, can be smooth with the right advice. What we find is that when your accountant, lawyer and financial planner can all work together great outcomes are achieved.


About Simon Clifford

Simon and his team at Adviser fp have developed an expertise in Planning for Retirement, Lifestyle Planning, Wealth Management, Personal Goal Setting, assisting clients to become financially well organised, Superannuation, Risk Management, Succession Planning and Buy/Sell Agreements.

Simon started Financial Planning in 1988, and subsequently joined his brother, establishing a financial planning business in 1990. Having worked successfully together for 13 years, Simon eventually bought his brother out in 2003. Apart from having worked with his brother for 13 years, this process provided an invaluable experience in dealing with family in business in difficult circumstances. Needless to say, it was a difficult process and Simon believes had he known what he knows today, or had FBA at his disposal, it would have been a lot easier.

Simon’s business, Adviser fp is privately owned and he has been advising Family Business for approximately 9 years.

Family Business Australia and New Zealand provides this article for your information only. The content of the article should not be taken as advice. If you wish to explore this topic, please consult an advisor who you consider to have the expertise to provide specific advice in relation to your family business.

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