Posted on: 27th May 2025

Retirement Planning for Entrepreneurs and Business Owners

Running a business is exciting. There’s the freedom, the creativity, and the chance to build something that’s truly yours.

But while you’re busy growing your company, it’s easy to forget about something important—your own retirement.

Unlike people who work for companies, entrepreneurs and business owners don’t always have structured retirement benefits. That means the responsibility falls on you to create your own retirement plan.

The good news? With a bit of planning and the right steps, you can enjoy a secure and comfortable retirement. Here’s how.

Start with Your Goals

Before you start crunching numbers, think about what kind of retirement you want.

When do you want to retire? Where would you like to live? Will you want to travel, start a new hobby, or help your children financially?

A clear picture of your retirement lifestyle helps you determine how much money you’ll need. It’s the first step in building a plan that works for you.

Don’t Rely Only on Your Business

Many business owners hope to sell their businesses someday and use the money to retire. While that’s a standard plan, it’s not always reliable.

In fact, only a small number of businesses actually sell successfully. And even if you do sell, the money might not be enough to cover all your retirement needs.

That’s why saving and investing outside of your business is also important. Diversifying your retirement savings helps reduce risk and gives you more options later.

Use the Right Tools to Save

As a business owner in South Africa, you have several good options to help you save for retirement:

• Retirement annuities (RAs):

  these allow you to invest for retirement while getting a tax break. You can contribute up to 27.5% of your taxable income (with a cap of R350,000 per year), and the money grows tax-free until you retire.

• Tax-Free Savings Accounts (TFSAs):

  you can save up to R36,000 per year (R500,000 over your lifetime) and won’t pay tax on the interest, dividends or capital gains.

• Pension or provident funds:

  if you have employees, you might have already set up a

  provident pension fund

  . They can also help you save for your own future.

Mixing these options can give you flexibility and maximise your retirement savings.

Plan Your Exit Early

Selling or handing over your business takes time and planning . The earlier you think about it, the smoother it will be.

Do you want to sell your business to someone outside the company? Or pass it on to a family member or employee?

Having a succession plan means you’re not forced to make quick decisions when it’s time to step back. It also helps make sure your business continues to thrive after you leave—and helps you get the most value from your hard work.

Watch Out for Common Risks

Even with a good plan, things can go wrong. Here are some risks to think about:

• Living longer than expected:

  great news, but it means you’ll need your money to last longer.

• Poor investment returns:

  especially if markets are down just after you retire.

• Rising medical costs:

  healthcare can become more expensive as you age.

• Inflation:

  prices go up over time, so your money might not stretch as far.

To manage these risks, keep your investments diversified, consider products like annuities , and make sure you have enough saved for unexpected costs.

Don’t Forget Insurance

Insurance can be an important part of your retirement plan. Think about:

• Life insurance:

  this can help your family financially if you pass away unexpectedly.

• Disability insurance:

  if you get sick or injured and can’t work, this covers your income.

• Key person insurance:

  if someone vital to your business passes away, this helps the company stay afloat.

These policies protect both your personal finances and your business.

Keep Up with the Rules

South Africa’s retirement and tax laws can change, so staying informed is important. For example, new rules about withdrawing retirement savings or how pension funds are taxed can affect your plans.

Working with a financial adviser who knows the latest regulations can help you stay on track and make smart choices.

Ask for Help

Planning for retirement isn’t easy, especially when running a business. A certified financial planner can help you set goals, understand your options, and build a personalised retirement strategy.

Expert advice can make all the difference—and help you feel more confident about the future.

Final Thoughts

You’re used to taking control and solving problems as a business owner. Planning for retirement is no different. The earlier you start, the better your chances of reaching your goals.

With a clear plan, the right tools, and good advice, you can look forward to a retirement that’s just as successful as your business journey.

Need help getting started? Talk to a financial adviser who understands the needs of South African entrepreneurs and can help you take the next step.

Speak to Holborn to learn how we can help you.