retiring  Most business owners state they have no plans on retiring anytime soon, according to recent surveys. Though they may be close to retirement age or past, they still want to work at their businesses until at least 70.

While this may surprise many of us who work at a regular 9 to 5 job, for those who own their own business, this is exactly why they started working for themselves. They are their own boss, they decide what goes and how many hours they work. But they were also among the first to realize that retirement in their sixties wasn’t realistic. They didn’t want to rely on what money they had put away or be forced to depend upon a pension. Having a steady stream of income that they were responsible for was the only way to go.

But how does a small business owner plan for the day when they do finally retire?

Most small businesses that are run by a sole proprietor, usually from their homes, will not fund retirement, if sold. Paying into CPP may also not be an option that is worthwhile. As a small business owner, you are usually better off saving for retirement through a TFSA or an RRSP if you feel you will benefit from it. Many small business owners have a savings account with high interest that is used only for saving for that day when they will take down their shingle and finally stop working.

For many others, full time retirement is not an option, either because of financial need or due to the willingness to always be involved in something of interest and what is more fulfilling and interesting  than in your own business? We now know that maintaining our interests and occupying ourselves with useful hobbies and/or work is the secret to a healthy lifestyle as we age. The best choice is to semi-retire and at the same time, save for the time when we are no longer able or willing to keep working.

Business owners are used to compromising and this will be useful when it comes to your retirement plans. Don’t put all of your eggs in one basket and don’t rely on being able to work as long as you’d like to. Start streamlining your business and making plans to simplify it in order to keep it going as long as possible. Cut down on as many overhead expenses as you can and downsize as much as possible.

The cost of living is rising in Canada and as a small business owner, you have the tools to plan for your future, whether it be ultra comfortable or rather frugal. Lack of money shouldn’t mean you can’t enjoy your retirement years. There are resources available which are specifically aimed at small business owners such as The Canadian Small Business Owner’s Guide to Financial Independence.

© Chris Draper, DemGen Inc. 2015

image courtesy of theglobeandmail