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Is it Time to Retire Your Small Business?

Tristan Anwyn

December 16, 2015

Are you looking to sell or close your small business and retire in 2016? Then it's time to take stock and make sure you're financially prepared for retirement.

If you're properly prepared, you'll be able to enjoy your retirement, secure in the knowledge that you have enough money coming in to cover your needs.

Make your retirement a good one by going through this checklist and making sure you're financially prepared for your new phase of life.

Know What You Need

The first step to successful retirement planning is knowing what you need.

Sit down and figure out how much money you'll need month to month for a comfortable life.

As the article, "Average Retirement Income 2016: How Does it Compare to Your Plans?" points out, when it comes to retirement you'll need a specific spending and income plan to ensure you cover all bases.

Be realistic about both your needs and how you're going to cover them.

If you want to travel in your retirement, you'll need a different budget than if you're happy to stay home, for example.

Plan for Everything

The best retirement plan is one that covers as many eventualities as you can think of.

Having enough for your daily expenses and the life you want to lead is an important starting point but what about:

• Potential nursing home stays;
• House repairs;
• Medical expenses;
• Replacing your vehicle;
• A downturn in your investments.

Be thorough and look at all the possible expenses you'll need to cover in your retirement.

Planning ahead now means you won't find yourself struggling to raise funds when something comes up.

Look at Your Sources of Income

What sources of income will you have when you retire?

Knowing exactly what you will have access to is key to making sure you're prepared for retirement.

Start with your pensions, investments and savings.

As well as taking stock of what you've got, read the small print so you know what you can access and when, and whether you'll need to pay any withdrawal fees.

Don't Forget Alternate Sources

Look at other potential sources of income such as renting out a property.

You might also consider whether you want to take a part time retirement job, or do some freelance work in your free time to top up your budget.

As well as checking out your own income sources, do some research and find out what you'll be entitled to in terms of social security or insurance.

Test Drive Your Plan

The only way to know for sure if your retirement plan is strong enough is to test it.

Of course it won't be possible to test for every possible eventuality, but you can test your estimated monthly outgoings ahead of time.

Try a test period of up to six months where you live on the budget you've set out as your monthly retirement budget.

Be honest. Could you cover all your bills? Were you able to eat well and have money left over for fun and relaxation?

A short test will give you an honest indication of whether your retirement budget is truly adequate.

If you're looking to retire in 2016, these steps will help you get thoroughly prepared.

You'll be able to enjoy your retirement, knowing that you have the resources you need to live well and enjoy your new found free time.

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