Retirement Planning For Business Owners

When you own a business, there's a good chance that it's your main focus.  When you're spending the majority of your time either working or thinking about working, planning for your own retirement may feel relatively low on the priority list.  In fact, for many small business owners, selling their business is their retirement plan but that doesn't have to be the only option.

To create your retirement plan, you may want to consider the following things:

Set goals

Consider the age you would like to retire and how much you will need to save in order to make that a reality.  The younger you plan to retire, the more you will need to save, so it's better in the long run if you can start saving earlier.  If you haven't started saving for retirement yet, the next best time is now!  You will need to consider what your expenses will be like post-retirement as this will dictate the type of lifestyle you lead.  If you are unsure of how much you need to save, this calculator is a helpful tool.  A Financial Advisor is also a great resource, as they can help you create a personalized retirement plan.

Pay yourself first

It can be difficult to pay yourself first when your business is your top priority.  Putting money back into the business is important to its operation and its future but you also need to consider your future and what it looks like without the business.  In order to establish a savings plan for yourself and to maximize the efficiency of the money you put back into your business, take a close look at your finances or talk to your accountant or bookkeeper.  By taking an in-depth look at your finances, you will be able to find a balance, in order to both save and invest in your company.

Create a succession plan

In order to retire, you must decide what will happen to your business once you aren't running it. Oftentimes, business owners will sell their business.  In order to do so, an important question to ask yourself is "How will my business run without me?".  If the answer is that it won't, it's time to create a succession plan.  While working full days, seven days a week, may work for you, finding a buyer who wants to work the same amount could be a challenge.  That's where a Business Broker may be able to provide you with some insight.  Much like a real estate agent can help you prepare your home and sell it, a broker will do the same for your business.  Tax professionals and your Commercial Account Manager are also great resources to help you prepare for the sale of your business and upcoming retirement.

If you would like to discuss what will happen to your business after you retire, how to plan for retirement or if you have any other questions, I would be more than happy to address them for you.  Send us an email at info@cua.com and we can have a chat.

Revised Jul. 26, 2021

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