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Retirement is something you’ve worked your entire life for. It’s your time to sit back, take stock of everything you’ve achieved in your working life, and to relax.

But for some—family business owners in particular—the prospect of retiring after a lifetime of hard work can be a daunting one.

And it’s not just the thought of what to do: you’ve become accustomed to a certain level of lifestyle, and retirement can mean an adjustment to a different level of income.

Enjoying your retirement to its fullest all comes down to having the right plans in place

A 2015 KPMG and Family Business Australia survey found that only 9% of family business owners have a plan firmly in place for their retirement.

The takeaway from this is that many family business owners out there are unsure of the mechanisms to put in place that will enable them to maintain an adequate income post-retirement, or even how to access these mechanisms.

The starting point for retirement planning lies in your biggest asset: your business.

Making the most of your family business

For family business owners, the first step to retirement comes with deciding whether to sell your business, or if you want to keep the business in the family.

Selling a family business is a valuable nest egg that can add millions, if not tens of millions of dollars towards your retirement—but only if you sell it outright. Selling the business you’ve worked hard to build to an unaffiliated third party allows you to cleanly part ways, wash your hands of it, while at the same time unlocking a windfall that can go a long way towards a long, comfortable retirement.

But this takes on an altogether different nature when you hand over the reins to a family member.

The issue is that a significant portion of your wealth is tied up in the valuation of your business. So if you’re transferring ownership to another family member at least part of this equity needs to be released in order to maintain a level of income into retirement.

Given the family ties, a straight buyout from a family member is usually unfeasible. The reliance on such an event could spark interfamily conflict, leading to a degradation of relationships, and a decidedly unhappy retirement.

While this might seem like a huge first step, the good news is that there’s help out there.

How to start your retirement planning

Engaging a trusted, independent financial adviser to support you in this planning means you’re putting yourself on the path to a successful transition.

With their guidance and support, you’ll be able to determine how much money you need to live the lifestyle you desire, and how to structure the sale of your business so that it allows for this.

So our advice? Speak to your trusted financial adviser and raise your intention to retire.

They can begin the process of collaborating with their team of professionals, and start creating a cohesive, comprehensive transition plan that’s well thought out, financially effective, and considers your unique family dynamic and relationships. A plan that looks at all areas of your life.

With a holistic, long-term plan in place, you can take comfort knowing that when it’s time to retire, all you need to do is sit back, relax, and enjoy the next stage of your life.

Joe Stephan

Director, Stephan Independent Advisory

Joe Stephan graduated in 2002 with a Bachelor of Business (Fin Plan) under the tutelage of his father (Program Leader of Financial Planning at RMIT University).

You will hear Joe bandy about the idea of “pure financial advice”, which is given objectively and focused around the needs of individual and not the internal needs of the business providing advice.

Joe is realising his vision every day through his Independent Advice Firm which he owns and operates with his brother James. Joe also spends a portion of his time teaching tomorrow’s Financial Planners at various Melbourne Universities including RMIT & LA Trobe.

  • Enjoy the fruits of working life Joe & James were able to provide me with the impetus to take the next step into retirement which could have been delayed without quality financial advice. Dr. Kevin Adams Self Funded Retiree
  • Professional practice to be admired Joe & James' professional practice is to be admired. They are always there for his clients when needed. They freely pass on their expert knowledge without hard product selling techniques. Dr. Elspeth Mckay Associate Professor
  • Personal advice for complex lives Stephan Independent Advisory took the time to understand our situation & tailor their advice & solutions to our specific needs which, being a business owner, can be quite complex. Paul Marsh - Principal P2 Group - Business Owner
  • Family centered advice We have moved our investments from being a private client with a major bank to Stephan Independent Advisory in 2018. Since this move, we have been surprised at the depth of understanding encountered from Joe and James about our future plans and their ability to comprehend exactly what we wish to achieve. Mr Graham and Mrs Judith McKnight Self Funded Retirees
  • Values aligning with our own Clear, timely and direct responses in all areas of communications are outstanding. Meetings are planned and run efficiently to deliver on all our expectations. The firm’s values align to our own so that trust is readily established. Mr John and Dr Kim Watty Self Funded Retirees

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