Monday, March 23, 2009

Retirement For Small Business Owners

Posted By: Ken Smith


Personal financial planning for small business owners is far more complex than for employees because the business and the personal are usually closely intertwined in just about every aspect, from the financial to the emotional. It can be a big headache, but this isn't the time for small business owners to put their personal financial planning and retirement savings on the back burner.

A few years ago, the Canadian Federation of Independent Business reported about 70% of small business owners were planning to retire within 10 years. Given the current economic climate, those who still have that goal will need to be proactive and have a solid strategy in place.

"A business owner has to look at it holistically," says certified financial planner Malcolm Ross, founder and president of Vancouver-based Investaflex Financial Group, which specializes in wealth and business management advice for family businesses.

"Often corporate financial planning is done by an accountant, the personal financial planning is done by a financial advisor, and the guy that provides the insurance and group benefits isn't necessarily working with the accountant or other advisors, so you get fragmented advice."

In a holistic plan, a business owner should first ensure personal assets are protected. "We look at the nature of how they're conducting their business and how that impacts them from a personal risk perspective," Mr. Ross says. Incorporation reduces the risk to the owner's personal assets.

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