Retire in peace

AMANDA MORRALL

Funding retirement on the back of a business sale? Join the club.

It is estimated that seven out of 10 business owners are planning on just that.

The combined value of businesses owned by baby boomers planning to step out of business in the next three to five years is estimated at $50 billion.

In our latest MoneyMakeover, financial advisers Jeremy Flood and Chris Wasley offer their respective views on a family-run business looking to unwind without losing sleep or profit.

Overview

Jack and Susan operate a successful North Island business valued at $7 million.

The couple, in their 60s, have four grown children. After a recent health scare, Jack is planning on retiring next year and Susan hopes to do the same.

They would like to enjoy the fruits of their labour by travelling, playing golf and enjoying a comfortable lifestyle.

The family business is thriving and has been protected from the recession. Still, Jack has some uncertainty whether the sale of the company will adequately provide for them in retirement.

Also, he is protective about the company and wants to ensure he leaves it in good hands.

While he would like to keep the business in the family, the only sibling employed by the business could not afford it, so Jack and Susan would have to keep their money in the business to keep it in the bloodline.

They want to know what their options are and how either scenario would leave them.

Their stated goals are to retire in 2010, "stay alive", pay off their debts and set aside $500,000 per child as an inheritance.

Here's how it breaks down:

Gross combined income: $150,000.

Assets: Including land, cash, cars and lifestyle block: $1.95 million.

KiwiSaver: $20,000.

Liabilities: Including mortgages, personal loans, hire purchases, overdraft and credit cards: $337,500.

Here's what our experts say:

- © Fairfax NZ News