Although many business owners don’t always want to retire, they should still plan for it in case something happens that is out of their control. Unfortunately, for one reason or another, many seem happy to die at their desks, and very few take the initiative to actually sit down and map out a retirement strategy. Retirement is completely doable if an owner actually takes the time to examine their life and figure out what would make them happy in the future. Below are a few important factors to consider as you approach retirement age.

Business owners must understand their personal asset gap.

The personal asset gap is the difference between your current assets and what you need to have to retire comfortably. There are several steps you can take to determine your personal asset gap including obtaining a professional business valuation, accurately assessing your net worth with help from a CPA who specializes in business exit planning, and discussing your vision of an ideal future with a trusted advisor.

It’s also important to be realistic about your retirement needs and wants. Consider factors like longevity (how long you may live), your standard of living, and the impact of inflation on your budget when planning for retirement. In addition, surprise expenses can pop up during retirement so it’s important to have a team of advisors in place to help navigate these surprises.

Check-in with your advisors often and lean on their experience to help fill in any gaps in your plans. Pursuing retirement on your terms can surely be full of surprises, but it doesn’t have to entail the same level of risk as playing the lottery. For example, you may want to transfer ownership of your business to a child, only to subsequently find out that they never actually intended on running the company once you retire. Another possibility is deciding to sell your business assets to a third party; however, upon further inspection, you realize that their offer would provide just enough financial independence for yourself–but at the cost of firing nearly all 95% workforce after your departure.

Trying to anticipate these surprises by yourself is rough because you limit yourself to your owner’s experiences and understanding. Most people only transition out of their business once in their life, and being able to rely on the expertise of those who have been there many more times than you, is invaluable.

To all the business owners out there, don’t give up on retirement yet! Although it may seem daunting, with careful planning you can make the transition as smooth as possible. Here are a few important questions to consider as you approach retirement age:

  • What is your personal asset gap and what do you need to have in order to retire comfortably?
  • What are your retirement needs? What are your retirement wants? Consider factors like
    longevity (how long you may live), your standard of living, and the impact of inflation on your
    budget.
  • Do you have a trusted advisor to walk you through the process? Make sure to check in with your
    advisors often and lean on their experience to help fill in any gaps in your plans. With these
    steps in mind, retiring on your terms can be a reality.

Contact us today and let us work with you to build the future you wish to have.