By Leslie Munas
Manager, Tax Services
When it comes to retirement, too many executives and business owners make the mistake of thinking it will suddenly arrive when they hit the magical “65” or become eligible for Social Security benefits. But it’s not something that just happens when you reach a certain age or save enough money in your bank account. You won’t find a retirement plan neatly laid out in the latest issue of AARP The Magazine waiting in your mailbox.
You have to be very intentional in your planning for retirement, and you should start five to 10 years before you plan to clean out your office and say goodbye to the daily grind.
So, why all the preparation? Why can’t you just pack up and leave?
You might not know if you’re even ready for retirement. Are you financially prepared? Are you mentally prepared? What are your spouse’s needs/wants post-retirement? Are you in agreement? There are many questions to consider before making the leap. You may consider a two to three month sabbatical a year or two before you plan to retire — as a trial run to discern the many aspects of retirement and which options are best fit for you and your spouse.
You should think of what you want to do with your new chapter in life. The worst feelings to have in post-retirement are regret or boredom — the Retirement Blues! Because people often simply feel pressured to retire, they end up not knowing what to do with their free time. In your transition period, give yourself a test run — try out some hobbies or activities, figure out what you like, maybe join a club or start growing a garden. Plant the seeds for a fulfilling life after retirement.
Your business needs time to adapt. This is definitely the case if you’re leaving the company in the hands of a family member or executive leader. They need the guidance and supervised leeway to successfully transition into managing the daily operations of the business and forming their own long-term vision for it. After you leave, you’ll want your replacement ready to hit the ground running in a seamless fashion. From a business perpetuation standpoint, you need to consider all of the stakeholders you will impact by leaving and handing over your responsibilities to someone else with whom they will have to do business. How can you maintain their loyalty and build their trust in a new leader?
Above all else, retirement is a practical measure and very personal to each person. Some business owners think they are going to work forever, but you never know what hurdles life will put up in your path. Health issues, personal burnout, economic downturns. Even the most stubborn and determined business owners are susceptible to all of these obstacles. Don’t let them sneak up on you! Grab a pen and paper and start a written retirement plan today. Preparation is something you’ll never regret. Consider reaching out to a trusted friend or business associate for input and feedback — they might help you discover your blind spots in your retirement planning. Good LUCK!