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Pensions for Business Owners
5. Retirement Planning
5.1 Choosing the right time to retire is crucial and is often determined by how you have funded your pension.
- If you are a member of a final salary scheme, your only options are to take a tax-free lump sum and an income. The income is guaranteed until you die.
- Defined contribution members can take a tax-free cash sum of 25 per cent of the total fund and either choose an annuity or income drawdown.
- The new rules make it possible to claim a pension but continue to work.
- By taking phased retirement, which splits the total retirement fund into segments, individuals can stagger the purchase of annuities up to age 75 and keep the unclaimed assets invested.
- If you are selling the business to pay for your retirement, seek professional advice on the exit strategy.
5.2 When seeking a professional adviser, make sure they are experienced in advising on the specifics of pensions for business owners.
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