Business owners are known for pouring their heart, soul and a big portion of their money into their business. But some things aren’t in the business plan.
A retirement annuity provides a disciplined and easy way to save for retirement.
Here are five reasons why it makes sense for business owners to invest in a retirement annuity:
Contributions are deductible from taxable income up to a certain limit. Amounts which exceed the limit can be carried forward to later years. Or used to increase the tax-free portion of any lump sums at retirement. Or deducted from your retirement income as if they were current contributions and reduce your taxable income. The fund into which your money is being invested, is in terms of present legislation, not being taxed at all. At retirement you may take up to a third of the proceeds in cash, which could be partially or even totally, tax free. If you dont need the money when you retire, you can leave your investment in your retirement annuity, where it continues to earn returns.
A retirement annuity is a very safe investment, since with one or two exceptions, it can’t be attached by creditors.
By investing in a retirement annuity, you spread your investment, and hence, your risk.
The retirement age for retirement annuities was, until recently, limited to age 69. A change in legislation now makes it possible for people over age 69 to join, or carry on investing in, a retirement annuity fund.
As the funds in the retirement annuity fund falls outside your business as well as your personal estate a retirement annuity will provide a protected income source for the business owner and/or his dependents at death or retirement.
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or speak to your financial adviser.
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