Research by Zoho Financial shows tax inefficiencies and lack of retirement planning
A survey of Canadian Professional Business Owners conducted by renowned Financial Advisory firm, Zoho Financial shows some interesting trends in the Canadian business landscape.
Harpreet Singh, founder and lead Financial Advisor of Zoho Financial, an advisory firm based in Ottawa, Ontario, explained it in more details and shared some of the survey’s findings. “We asked over 120 businesses, from IT consultants to Dentists, Physicians, Lawyers, Physiotherapists as well as some realtors and real estate investors about how are they planning their retirement in future, their succession plans and how do they invest surplus dollars from their corporations”, Singh explained that many of these businesses were current or target clients.
Many businesses have very little or no risk management strategy, including no adequate coverage in the event of life loss or adverse change in health. Additionally, they don’t understand the buy-sell agreements when operating in partnerships and over 90% of those in multi-partner business structures had no financial plans to fund their buy-sell agreements.
Similarly, over 86% of those who have surplus corporate dollars were either keeping money in their chequing accounts or investing in tax inefficient ways, therefore triggering high taxes on an ongoing basis or the highest tax brackets at the time of retirement.
“This is devastating for Businesses when they find out that they have been working for Canada Revenue Agency all these years and only half (or less) of their money will go to their retirement or families”, Singh added.
There are ways to be more efficient with retirement savings, estate planning and succession as well as tax planning. However, it is a long-term, almost boring plan because it doesn’t focus on “timing the markets”, “beating the markets” or “growing 10X”. Instead, it focuses on efficiencies, planning and strategies.
“It is a combination of using the tax code to the max, retirement strategies that emulate the big pension plans and using insurance to not just mitigate risks, but also create a robust basket of financial independence.” Singh concludes that it needs a simplistic, yet sophisticated financial planning, but is achievable with the right set of tools and expertise.
Zoho Financial is based out of Ottawa, Ontario. Harpreet specializes in building financial plans around estate, retirement, tax and succession planning for Business Owners and Real Estate Investors. For discussing more, use book.zoho.ca/coffee to book a virtual coffee appointment.
Media Contact
Company Name: Zoho Financial
Contact Person: Harpreet Singh
Email: Send Email
Phone: 888-zoho123
Country: Canada
Website: https://zoho.ca/
