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Why don’t accountants plan for their own retirement?

Why don’t accountants plan for their own retirement?

Although they are good at giving financial advice to others, chartered accountants seem to be surprising lethargic when it comes to planning for their own retirement.

Kath Haines, the chief executive of the Chartered Accountants’ Benevolent Association, said their members are often ill-prepared for the changes that come with retirement.

As well as financial considerations, accountants may also find it challenging to decide how to spend their time and cope with the impact retirement has on their relationships. One of the participants in the CABA research admitted spending more time planning an annual holiday than retirement, a situation which led Haines to conclude that retirement catches accountants unaware.

Contractor accountants have less opportunity to ease themselves gently into retirement because there are few opportunities for part-time and temporary work. Haines pointed out that it would be better if they could transition towards retirement by reducing their working hours gradually. Contractor accountants and small practitioners may also have problems retiring due to problems selling their business or succession planning.

CABA is reviewing its services with the aim of providing more support to accountants needing help and guidance preparing for their retirement.

Meanwhile, the Organisation for Economic Co-operation and Development has suggested that the coalition should be encouraging employees to delay retirement in order to boost tax take.

The latest economic forecast summary from the OECD says that if the effective retirement age was increased, it would lessen some of the fiscal pressures.

Under current rules, if a person continues working after retirement age, their state pension payments rise by 1% for every five weeks deferment. If someone delays retirement by a year, they can take the 10.4% deferment as a lump sum payment with interest.

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: January 29, 2011 by Beto Ruiz Alonso

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