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Planning for Retirement as a Small Business Owner

By: Dan Miller, CFP®

As a small business owner, you are focused on running your business. Whether that be sales, marketing, bookkeeping, and so much more; you have your hands full. There’s a lot that goes on behind the scenes in making your business successful and profitable. 

What a lot of business owners fail to think about or plan for is retirement. Taking time to properly plan for your own retirement may fall to the wayside because of all the things going on in the present and near future. In fact, 34% of small business owners do not have a retirement savings plan in place. Here are four tips to help you create a solid retirement plan as a small business owner.

1. Set goals

Start thinking about when you would like to retire. Determine what you want the future to look like.

  • How much will you need to live comfortably in retirement? 
  • How many years do you have left to plan and earn?
  • Will you buy another home or car?
  • How much do you spend a year in travel?

2. Have an Exit Plan

You must determine how you will receive value from your business for retirement. 

  • Are you going to sell to external buyers? 
  • Will you sell to someone within your organization? 
  • Is someone in your family going to take over?
  • If so, do you have a succession plan?

3. Seek Support

Surround yourself with professionals such as financial advisors, CPAs, and business attorneys who can all help you successfully plan for retirement. These professionals will be able to determine sale of business, and if it makes sense to get lump sum payment or a series of payments over 5-10 years. 

Out of the business owners who said they were not confident about their retirement:

  • 10% said they want more guidance on investments and appropriate savings rates
  • 8% would like better retirement tools to help them understand expenses such as healthcare costs in retirement

4. Verify & Diversify

What is your business worth? 92% of small business owners do not know what their business is worth. Your business might be your most valuable asset, especially in preparing for retirement. It is crucial to have an estimate of what it is worth. There are many methods to use to figure out how to value a small business. Calculate the value of your business here.

There are also ways to invest that can potentially help save money on taxes now and in the future, as well. It is important to have balance and not rely solely on the sale of your business. 78% of small business owners plan to fund retirement with the sale of their business. 

Other sources to diversify retirement income: 

If you need help planning for retirement and answering some of the questions you have, please reach out to us or a trusted financial advisor. It’s never too early to start planning.


  1. https://paychecx.com/articles/employee-benefits/survey-small-business-owners-uncertain-about-retirement
  2. https://www.manta.com/resources/small-business-trends/small-business-retirement-savings-plan/?dest=%2Fresources%2Fsmall-business-trends%2Fsmall-business-retirement-savings-plan%2F
  3. https://www.businessnewsdaily.com/10276-prepare-for-retirement.html
  4. https://advocacy.sba.gov/2019/04/24/2019-small-business-profiles-for-the-states-and-territories/