Are you making enough for a comfortable retirement?
Having enough saved for retirement is a key concern for most people. As reported by Sky News, the minimum recommended retirement income for a single person is around £10,200, while a couple should have around £15,700. The ideal income for retirees, however, is valued at £33,000 per year for individuals and £47,500 for couples. For most people those figures can seem very daunting. Which is why it is always best to find out if you are making enough to live a comfortable retirement, and what you can do to ensure you end up living comfortably.
Calculate your total investments
Most business owners invest their profits into different accounts to hedge losses and maximise returns. To facilitate this, banks and stock brokers often offer easy instalment plans, withdrawing a fixed amount of money from you regularly to place into different investment vehicles. Though these services are convenient, it can be easy to lose track of exactly how much money is in each account. You will need to monitor these accounts to figure out how much you still need to reach the PLSA’s recommended pension pot amount.
To help you out, EQi’s pension calculator demonstrates how you can easily find out how much to put aside each month in order to reach your retirement goal. It’s also a good idea to download investment apps like Freetrade - which are becoming increasingly popular in the UK – to keep track of your investment transactions. The more control and awareness you have over your retirement funds, the better you will be able to determine whether you are making enough for a comfortable retirement.
Find out how much your business is worth
As you're getting ready for retirement, you might consider selling your business once you're confident you've made enough profit out of it. This entails calculating the value of your business assets, both tangible and intangible.
Tangible assets include physical items such as machinery, inventory, land, and cash. Meanwhile intangible assets are those that have no physical characteristics, but give businesses a competitive edge – for instance, intellectual property, trademarks, and copyright.
That said, it can be difficult to get an accurate valuation of your assets by yourself. Owners tend to overvalue their selling price in the market, so to be safe, be sure to consult with a professional. Additionally, you can read the UK Valuation Office Agency guide on how business properties are assessed.
Look for a passive income stream
Jumping off from our second point: letting go of your business doesn't necessarily mean having to cut off your income entirely. Depending on the terms of sale you’ve drafted, you can actually take this opportunity to create a passive revenue stream while keeping your involvement with the business itself to a minimum. For example, you can maintain ownership of your store's equipment and lease them instead to your buyer. This is one strategy you can employ when facing buyers who can’t outright purchase your business. If you’ve saved up enough money, you can even buy your store location and apply the same strategy above. You sell the business name and inventory, but rent out the real estate to keep cash flowing in. With a steady income you won’t need to worry as much whether you have saved enough, as you will have a passive income.
Following these tips can help you secure your retirement goals, and enjoy your golden years to the fullest. If you need further guidance, Contact Us for more advice on how to successfully run a business and achieve financial stability.