Small biz owners: grow your personal portfolio, in addition to your business

Small biz owners: grow your personal portfolio, in addition to your business 
- TD Canada Trust provides tips on retirement investment strategies for small 
business owners - 
TORONTO, Oct. 16, 2012 /CNW/ - Cash flow, payroll, overhead - managing the 
financials of a successful small business is no small feat. Crunching the 
numbers, some entrepreneurs may be tempted to defer their personal savings and 
investments in favour of relying on the equity in their business to fund their 
retirement. 
A poll by TD found that while the majority of Canadian small business owners 
polled who plan to sell their business (66%) will use the proceeds to fund 
part of their retirement, 14% admit they are counting on the sale of their 
business to fund their entire retirement. 
John Tracy, a senior vice president at TD Canada Trust, cautions small 
business owners against putting all of their retirement nest eggs in one 
basket. He says relying on the equity of a small business to fund 100% of a 
retirement strategy may be too risky. 
"While the equity in your business could potentially be a significant source 
of retirement income, it's equally important to make regular contributions to 
build your personal investment portfolio, both as a safety net and to maximize 
retirement income," he says. "Entrepreneurs should consider balancing the high 
risk investment strategy of a small business with other investment products, 
like mutual funds or GICs." 
Tracy offers his tips on how to plan for a comfortable retirement and grow a 
small business simultaneously: 
1. Open an RSP and automate your savings 
Without a guaranteed pension, an RSP is one of the best saving and investment 
vehicles available today for small business owners, so you should take 
advantage of the benefits of tax-deferred and compound growth that an RSP 
offers. The majority of small business owners identify cash flow as the most 
significant barrier to the success of their business, so it can be daunting to 
find a chunk of money to contribute to your retirement savings each year. 
Start small and set up a pre-authorized transfer that automatically transfers 
a set amount at regular intervals into your RSP. 
2. Use income-splitting strategies to boost your family's retirement savings
Consider income-splitting strategies and invest your tax savings into your 
RSP. For example, if you hire your spouse, you can effectively split income 
among family members. This strategy allows you to shift income to family 
members in a lower tax bracket, reducing your family's overall tax bill. 
Alternatively, consider having a lower-income family member make the RSP 
contribution. Choose a family member whose taxable income is low, but is 
expected to increase in the future. Then, defer deducting it until the income 
increases, netting a larger tax benefit. 
3. Consider issuing dividends to fund your RSP contribution
Unlike money paid as salary, bonus or commissions, dividends are often paid at 
a lower tax rate, allowing for a greater year-end RSP contribution. Any tax 
refund realized as a result of the RSP contribution can be funneled back into 
investments. 
4. Consider a Tax-Free Savings Account (TFSA)
Small business owners who draw little income from the business should consider 
a TFSA. There's no tax payable on any investment income or growth. It's 
also flexible! Depending on the type of investment, funds can be withdrawn 
anytime. 
5. Get expert guidance
Entrepreneurs sometimes have trouble outsourcing, but many successful small 
business owners surround themselves with experts to navigate through the 
challenges of owning a business. A small business advisor at your bank can 
help you develop a financial plan to build a thriving business today and your 
financial advisor can help you develop an investment plan for a comfortable 
retirement in the years ahead. TD Canada Trust has advisors in branches across 
Canada, many of which are open evenings and weekends, to help small business 
owners make the most of their time. 
About TD Canada Trust
TD Canada Trust offers personal and business banking to more than 11.5 million 
customers. We provide a wide range of products and services from chequing and 
savings accounts, to credit cards, mortgages and business banking, to credit 
protection and travel medical insurance, as well as advice on managing 
everyday finances. TD Canada Trust makes banking comfortable with 
award-winning service and convenience through 24/7 mobile, internet, telephone 
and ATM banking, as well as in over 1,100 branches, with convenient hours to 
serve customers better. For more information, please visit: 
www.tdcanadatrust.com. TD Canada Trust is the Canadian retail bank of TD Bank 
Group, the sixth largest bank in North America. 
*From October 3 - 6, 2011, an online survey was conducted among a sample of 
609 Canadian small-business owners who are Angus Reid Forum panel members. The 
margin of error on the full base — which measures sampling variability — 
is +/- 3.91%. Discrepancies in or between totals are due to rounding. 
Steve Presant / Liz Christiansen Paradigm Public Relations 416-413-5194 / 
416-413-5188 spresant@paradigmpr.ca /lchristiansen@paradigmpr.ca 
Sandra DeCarvalho TD Bank Group (416) 944-7095 Sandra.decarvalho@td.com 
SOURCE: TD Canada Trust 
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CO: TD Bank Group
ST: Quebec
NI: FIN FIN ECOSURV  
-0- Oct/16/2012 12:30 GMT
 
 
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