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“My business is my Pension” – oops !


“My business is my Pension” – oops !

By , April 4, 2020

Many business owners do not contribute funds into a formal pension scheme because they believe their business will funds their retirement.

The capital and cash flow requirements of the business typically comes from the business owner.  This is actively in the form of injection of capital from savings or from a drawdown on home loans for example.  Sometimes it is passively in the form of reduced drawings.  Many business owners are not paid a market salary, but take dividends.  Often this is what’s left after everything else is paid.  Many have spouses who contribute to the business without being paid properly.  And as the research shows very few contribute to pension schemes.

SME business owners are used to being in control managing their own affairs.  They say “pension funds are losing money”, or “I can get a better return inside my business.”

In some cases this may be true . The benefits in terms of asset protection and taxation efficiency far outweigh these issues when analysed correctly.

What Do You Need for Retirement?

Of course the research also shows that less than half of business owners successfully extract the value of their business upon retirement.  In order to fund retirement many assume the value of the business is actually enough.  Retirement is becoming more expensive as people live longer.  And most business owners have no idea how much their business is really worth.  They have never had it independently valued.  Do you know how much your business is really worth? Right now?

Do you know how much you need to have the kind of retirement you want?

There are many more options for pension planning than the off-the-shelf pension fund wrappers.  Many business owners find self managed funds scary because of the legal and compliance complexities.  With the right advice from an experienced wealth and pension advisor this does not need to be a major issue and the benefits far outweigh the increased effort, time and cost.

An advisor who understands the complexities of tax, contribution caps and capital gains tax will help you to get the right funds in place to generate a tax-effective income stream in retirement. With many family businesses owned and run jointly by husband and wife, there are tax opportunities available to both parties.

If you want to find out how much your business is worth, try our FREE valuation tool for an indicative value.  It’s the first step to IDENTIFY the value in your business so you can start planning for your retirement with confidence.  Here’s the link


Craig West

Craig West

Executive Chairman | Succession Plus

Craig West is a strategic accountant with over 20 years of experience advising business owners. His background as a CPA in public practice has provided invaluable experience in the key issues of concern to business owners.

In March 2014, Craig was appointed Executive Chairman of the SME Association of Australia, Australia’s largest small business organisation representing over 300,000 business owners.

In October 2014, he was awarded the Exit Planner of the Year at the Exit Planning Institute Annual Conference in Texas, USA, due to his innovative development of an exit planning process to help business owners maximise business value and achieve a successful exit.

Craig’s proprietary structure - a Peak Performance Trust - has won the Australia-wide award for the Employee Share Ownership Plan of the year twice in four years.

In November 2018, Craig launched SME Experts in partnership with Mark Bouris’ Mentored on Podcast One and quickly grew the monthly podcast audience to over 26,500 downloads; in October 2019, he released a new podcast focused on medium-sized businesses - Mid-Market Matters.

In July 2021, Craig joined the NSW Committee for STEP (Society of Trust & Estate Practitioners) – focusing on advising families across generations.

Craig has also launched a SaaS platform, Capitaliz (which captures the 21-step process), to assist other advisers internationally deliver advisory services at scale.

In November 2021, Craig was appointed Executive Chairman of NSW Leaders, a business mentoring group for leading NSW businesses.

In July 2022, Craig West received the award of Doctor of Business Administration for his research thesis titled “Examination of the key factors driving business exit options in Australian Small and Medium Enterprises.”

Craig is passionate about encouraging business owners to think strategically, maximise the value of their business and achieve a successful exit.