20/10/2021
IF you are a doctor, dentist, accountant or other professional who owns their own practice, nothing is more important than planning for the future and planning for retirement. Whatever your age or stage in your professional life, failing to plan for your retirement amounts to one thing .....Planning to fail. None of us can predict what will happen in the future.
If you own your professional practice, your future retirement income will be dependent upon the performance of the practice, whether it can be sold as a going concern and for what value, and how that sale may be structured. Your retirement income will also be dependent upon the performance of your other investments and any pension you may have together with any savings that you may have accumulated.
WHAT IS YOUR PROFESSIONAL PRACTICE WORTH?
While there are many methods for calculating the worth of a professional practice, one common method is to look at a multiple of core profits. If you are considering selling your professional practice, it is important that you have your practice valued. Knowing the true worth of your practice is essential.
DO YOU WANT TO RETIRE TOTALLY, OR DO YOU WISH TO WORK AS A CONSULTANT/ASSOCIATE
Many professionals hate the idea of retiring fully. If you are over 50 you need to consider whether you want/can retire in full at your planned retirement date or, in the alternative, whether you wish to continue to work in a more limited role as a consultant or associate ( essentially this means working for someone else).
Whatever your decision, a competent Advisor ( Brendan Guppy) can assist a professional in making the best decision.
TRANSITIONING FROM PRACTICE INCOME TO RETIREMENT INCOME
The sale of a professional practice can generate a significant chunk of income, but the transition from living on practice income to living on retirement income needs to be managed carefully to ensure financial security.
YOU MUST HAVE A PLAN FOR RETIREMENT
To retire from your practice you must have a plan. In creating a retirement plan the first step is to assess what your likely income will be when you plan to retire. The other side of the equation is estimating what your anticipated expenses will be.
KEY QUESTIONS THAT NEED TO BE ANSWERED BY YOUR PLAN
(This is a definitive list and is not a substitute for a financial advisor.)
How much retirement income you will need?
How might your income needs change over time?
What other sources of income you have to draw on?
What will your costs be post retirement?
How will your income be eroded by inflation or poor performance of investments?
What will the impact be from a major stock market crash or economic downturn?
How long will you live?
