ENTREPRENEURS are a special breed of people who often risk everything to turn a dream into reality.

ENTREPRENEURS are a special breed of people who often risk everything to turn a dream into reality.

When leaving a position with a company in order to begin their own business ventures, investments, shares, unit trusts, any other savings, and endowment policies are cashed in and surrendered.

In addition, funds payable to them from their corporate retirement plans are used. This is a precarious decision since provision for retirement is then lost.

It is important to note that when sourcing funding for a new business venture, one cannot cash in a retirement annuity until the age of 55.

During the 1960s my mentor expressed the importance of contributing to a retirement fund in the following way:

He stated that everyone hopes to create wealth during their lifetime.

Those who are fortunate and achieved this will not have missed the small premiums they'd contributed towards their retirement.

But those who were unable to achieve this will be faced with a substantial amount at retirement.

In playing "catch up" with retirement savings, one cannot reasonably expect to calculate when and how to retire if one hasn't assessed your future financial requirements.

The starting point is to calculate how much income will be required, what your current assets are worth, and what your needs will be at retirement, using a 10percent growth on current assets.

Deduct this amount from the amount you need, (there will be a shortfall), then calculate:

lA basic amount you may need to cover the shortfall.

lA starting point escalating to equal the shortfall.

If one has depleted one's retirement funds and ceases to make contributions, then it is advisable, once the new business venture has reached a level of profitability, to begin saving aggressively to make up for lost time.

Contributions to retirement and savings plans will not only need future monthly contributions but an initial lump sum.

If one utilises these funds to start up a business and one needs to start saving from scratch again, the temptation is always there to go for higher risk products and aggressive investing in order to make up for the lost compound interest.

Just bear in mind that the younger one is, the more time your investments have to recover from high risk strategies.

If high risk is the route taken, ensure that there is still a portion of funds in lower risk products in order to diversify, taking the time frame left to retirement into consideration.

If one is unable to "catch up" or time is running out, there are three options:

lContinue working past retirement age - it doesn't have to be a 40-hour five-day week, it can be cut down to a few hours a day, or a few days a week, obviously with a reduction in income.

lLower ones expectations for retirement years by reducing your anticipated lifestyle. Instead of travelling overseas twice a year, once a year will need to suffice. Perhaps consider moving to a smaller home?

lFind other means to generate cash such as working part time or perhaps selling something on the side.

l The writer is a marketing manager at Old Mutual