BMO SmartSteps for Business Offers Top RRSP Tips for Entrepreneurs
TORONTO, Jan. 28 /CNW/ - With 50 per cent of Canadian small business owners over the age of 45 set to retire within the next 10 years, there is a growing need for these entrepreneurs to invest in their retirement beyond the equity of their business.
Many business owners expect to sell their businesses when they're ready to retire and then live comfortably on the income generated from the sale. However, this strategy can be risky if you can't sell for the price you need or you are forced to step away from the business sooner than you planned.
While a business is a major part of an entrepreneur's net worth and can provide retirement income, it's also essential to establish an RRSP. Top tips are available on BMO SmartSteps for Business (bmo.com/smartsteps), a new online tool that gives owners of small and medium-sized businesses a customized plan to make their banking more efficient, help boost productivity and take care of financial needs that go beyond their businesses.
Local BMO experts are available for media interviews to discuss the retirement strategies and tools essential for Canadian entrepreneurs, including:
Top 7 reasons every business owner should have an RRSP:
Diversification: Avoid putting all your eggs in one basket. Establish a source of income independent from your business so you have retirement income that is not tied to the sale of your business.
Tax benefits: Every dollar you contribute to an RRSP reduces your taxable income. Over the long term, the power of tax-deferred compound growth is substantial.
Security: Holding some conservative investments such as Guaranteed Investment Certificates can offset the volatility of your business returns that may be affected by an economic downturn.
Flexibility: You and your spouse can each withdraw up to $25,000 from your RRSPs to use as a down payment on your home.
Bargaining power: With the strength of an RRSP behind you, you're in a better position to hold out until you find the right buyer for your business.
Protection: With the resource of an RRSP, you have protection if you need to exit your business due to unexpected circumstances - such as poor health - or at a time that is not ideal to sell.
Reliability: At any time, you can convert your RRSP to an annuity that will provide you with guaranteed income for life.
SOURCE BMO BANK OF MONTREAL
For further information: For further information: or to arrange for an interview, please contact: Martha McInnis, Toronto, email@example.com, (416) 867-3996; Ronald Monet, Montreal, firstname.lastname@example.org, (514) 877-1873