Retirement Planning: 4 Ways Your Small Business Accountant Can Help You Plan Your Retirement

3 min read
26 January 2021

According to the Australian Bureau of Statistics, the average retirement age is around 63. However, many small business owners and professionals keep working well into their late 60s or beyond because they love what they do. Retirement planning is all about having choices, whether to keep doing work you love or changing course to spend time doing something else you are passionate about. The key is making sound financial decisions well ahead of time.

One of the most important aspects of retirement planning is having a vision of what you want your life to become. A small business accountant might not be the person that first comes to mind when you think about visions, dreams and imagining your future, but there are some very important ways they can help you make them come true.

Retirement planning means working out the numbers

When you think about how much superannuation and other investments you might need, “as much as possible” is not the best benchmark. As small business accountants, we work with many new clients who have not got a clear picture of exactly how much they need to have in their nest egg.

The Global Financial Reality Report 2018 found that 45% of Australians feel insecure about the amount of money they will have put aside for retirement. That’s almost half of the working population.

One of the biggest causes of insecurity is not knowing where you stand, where you are going and how you will get there. A small business accountant can help you establish how much you are likely to need to live comfortably after retirement, and exactly how much you will need to accumulate in terms of superannuation between now and then.

Small business accountants know how to put a price on comfort

Comfortable means different things to different people, and as small business accountants we understand that being able to put an approximate price on it actually matters. Does your retirement dream involve travel? Will you be downsizing? Does being a part-time gray nomad appeal? Do you want to be free to do voluntary work for a cause you are passionate about?

All of the possibilities your next chapter holds have a financial aspect. That might be the calculations around selling the family home and purchasing a smaller one, or the cost of owning, garaging and maintaining an RV for your bucket list adventures, or investing in a course and equipment to take up a new interest or hobby.

A small business accountant can help you understand and prepare for the various costs and benefits of each element of your retirement planning vision - giving you more certainty about where you are going, and what you will do when you are there.

A small business accountant puts the ‘plan’ in retirement planning

Once you know how much superannuation you will need, you need a sound financial plan to maximise the likelihood you will actually achieve that amount, This is where a good small business accountant is like a coach who knows your strengths and can help you build financial strength in your retirement planning.

Just like planning to run a marathon, you need to get yourself and your finances in good shape. That means working with your small business accountant to understand what debt you have, and how it will be repaid before retirement. Establish how much you need to be contributing to superannuation regularly, and whether that will be best done weekly, fortnightly, monthly or quarterly.

There are taxation aspects to consider, such as the beneficial tax arrangements that apply to superannuation contributions. There might be options to gain an immediate benefit for the current financial year in terms of taxation obligations while also boosting your future financial security through additional contributions towards the end of the financial year.

Identify the risks and opportunities in your retirement planning

Superannuation is a very important part of the retirement planning picture, but there are other aspects a small business accountant can also help you understand. For example, how secure are your other investments? Is there an opportunity to be strategic in how you manage cash flow and investment decisions in the coming years to improve your overall financial resilience once you retire?

When we are working with clients who are planning ahead, we will also assist them to consider some of the important details like insurance, estate planning and the financial side of any property investments. The ultimate goal is to ensure your financial universe is arranged in a way that will maximise the comfort and security of you and your loved ones.

To learn more about retirement planning and how your small business accountant can help you secure your future, download our free ebook - ‘Your Money, Your Choice- Create Progress’.