How can baby boomer accountants in London retire comfortably?

Baby Boomer accountants in London who had hoped to retire at the age of 65 could find themselves having to work longer if they want to have enough money to maintain their current standard of living.

They need to face the harsh reality that savings and investments are not realising the desired returns.
Although Baby Boomers did benefit from the surge in property prices and a savings driven stock market, they are going to expect help from the younger generation.

But Mark Llloydbottom, a practice development expert, questions whether the upcoming generation can afford it.

The upcoming generation of accountants still has a mountain of debt from the days when they were a student. They probably have children and will have over stretched their finances to purchase a house. Bank managers aren’t going to lend them money to pay to retirement partners.

Lloydbottom says he has frequently encountered these scenes. He explained that if goodwill is allowed for in a partnership agreement, the capital account of the company normally equates to £500,000 per partner and this will be the sum the Baby boomer expects.

Many firms of chartered accountants are still locked into this model. Older partners receive the greatest share of the profits and the younger generation can do nothing about it other than leaving the firm, he continued.
Baby Boomers, realising that their retirement plans are looking decidedly unhealthy, might try to sell out, but as many of them have ageing clients, their practice value is declining.

Lloydbottom believes that accountancy partners should begin drawing down from their capital once they reach the age of 50 and focus on profitability and succession planning. He advocates a formula for Baby Boomers to put a 5 to 10 year plan in place to build up a retirement cushion by making the firm as profitable as they can and treat the sum they get when they eventually leave the firm as a bonus.

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