KEY QUESTIONS 20 MARCH 2017
HOW DO I HELP MY CLIENTS TO BECOME ENTREPRENEURS IN RETIREMENT? LISA AIREY, INVESTMENT ANALYST AT OLD MUTUAL WEALTH
20 MARCH 2017
WEALTH INTELLIGENCE WEEKLY KEY QUESTIONS
supported by the UK government’s New Enterprise Allowance, which provides budding entrepreneurs with financial support and a mentor. We don’t have any statistics on entrepreneurs in South Africa over
HOW DO I HELP MY CLIENTS TO BECOME
ENTREPRENEURS IN RETIREMENT?
the age of 50, but we expect the same trends as in the US and UK. There is no reason why your clients can’t start a business in retirement, as they may still have 20 good years ahead. They have time and skills on their side and don’t have the financial or family responsibilities of thirty years ago. As in any business venture, you have to help your clients accept the fact that it may not work out. At this stage of life, they can’t put all their life savings and retirement funding into a new business and end up losing their money. Rather try and source funding that doesn’t tap into their retirement savings. If your clients have never run or managed a business, they may need some guidance. Finding a mentor they respect and trust is critical. Another option is to approach the Government’s Small Enterprise
As a financial planner, you focus on helping your clients to retire comfortably. However, more and more retirees are starting their own businesses in their golden years. This doesn’t only help them to fill their time and follow their passions, but also make their retirement
Development Agency (SEDA) for assistance. Remember that even if your clients are withdrawing income from their retirement savings, any new income they earn from their business
savings last longer.
venture will have a tax implication, so they may need to seek tax
Many clients feel that 60+ is too young to retire and many new
what they have always wanted to do. When they do something they
retirees are looking for something to do to keep them busy and earn
love with the right attitude, approach and commitment, age will not
a small income. An example is someone who took early retirement
get in their way of making a success.
advice. Retirement may just give them the perfect opportunity to do
after the company restructured and decided to capitalise on one of his passions. He completed a tour guide course and ran a successful tour company focusing on backpacking youth tours around the Western Cape for the past 10 years. This trend is evident in both the US and UK. According to a 2014 study in the US by the American Association of Retired Persons (AARP), 10% of people aged 45-74 plan to start a business and 15% in that age group are already self-employed. Almost 25% of workers who change jobs after age 51 become self-employed. It also showed that a third of retirees delayed their retirement, while 44% of retirees continued to work part time. In the UK, 4.17 million people are self-employed, of which 42% are over 50 according to the Prince’s Initiative for Mature Enterprise. In the last four years, some 14 000 over the age of 50 started businesses
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