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Retirement plan that wins for the partner, clients and firm

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On June 14, 1976, I walked into the offices of Campbell, Rappold & Yurasits for my first day of work.

Where on earth have the last 42 years gone? I can’t possibly be old enough to contemplate retirement, but the calendar doesn’t lie. That time is here.

So, let me share some thoughts and advice on this transformation that most of us will face. While my perspective is shaped by the environment of a mid-sized local accounting firm, the processes can be applied to any small business.

If you are an owner, part owner, or partner in a business, perhaps the single most important step is to have a succession plan in place.

How will the business continue to operate when key employees or owners retire?

The simple answer is to identify people in the company who can best step into leadership roles. You should be training and developing people as top-tier personnel approach retirement age.

There are two vital factors that go into this:

<The person contemplating retirement must be willing to “let go.” Approaching retirees have to set aside the ego and allow others the opportunity to learn and grow.

<Implement ways to keep the up-and-comers in the organization. It’s a competitive environment, so we must take steps to ensure star employees know there are opportunities for advancement.

OPPORTUNITIES AHEAD

Our firm always has had a mandatory phaseout policy for partners. When I started, three of the partners were “ancient” – in their late 40s!

With the mandatory phaseout clause in the partnership agreement, I knew there would be opportunities for me if I excelled in my career.

I am now in my phaseout, which opens opportunities for those who started with the firm when I was “ancient.” This policy is an important part of our successful employee-retention.

PERSONAL DECISION

From the individual’s perspective, retirement is a topic each must wrestle with personally.

Sometimes it is an event over which we have no control. For example, most large accounting firms have a mandatory retirement age. Whether that person seeks other employment is a personal decision.

Many in the professional services field have the rare opportunity to exert some control over how we retire. That is, we can walk away completely or we can cut back gradually on our responsibilities.

In our firm, the mandatory phaseout only applies to profit-sharing ownership. A partner who has completely phased out may continue to work and get compensated for what he or she is able to bill. This provides flexibility to work as much or as little as one chooses.

BETTER FOR ALL

I have decided to not continue to work in the firm when my phaseout is done.

In fact, I have decided to exit sooner than necessary and have begun a three-year process of transitioning my clients to others in the firm.

This has the dual benefit of allowing me to ease into retirement, as well as allowing clients to begin working with new people while I am still around to assist.

As I enter the second year of this plan, it is working well for the firm and me. I am working less and experiencing a taste of what retirement will look like, and the firm is maintaining client relationships.

SOONER IS BEST

Obviously, this opportunity is not available to all. As a Certified Public Accountant, I have helped many clients navigate the retirement process and applied my experiences with them to my circumstances.

I would encourage anyone who does not have this type of background to bring a CPA into the picture sooner rather than later.

A CPA will be a tremendous asset for you and your business.

Editor’s note: This article originally appeared on the website of the Pennsylvania Institute of Certified Public Accountants.

James S. Anderson, Certified Public Accountant, is a partner at Campbell, Rappold & Yurasits LLP in Salisbury Township. He is a member of the Pennsylvania Institute of Certified Public Accountants’ CPA image enhancement committee and can be reached at janderson@crycpas.com.

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