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5 Steps to Retire From Your Business With Confidence

5 Steps to Retire From Your Business With Confidence

You’re a business owner who has invested a lot of time and effort into your company’s success. How much have you thought about what happens when you leave this position? You will eventually have to step down and give the reins over to someone else. You can have peace of mind when you move on to the next stage of your life, even if you plan to continue working for many years. You can anticipate future challenges and opportunities and create financial contingency plans to improve your prospects. These are five constructive ways to think ahead.

1. You and your business can decide what the future looks like for them.

What do you want the next chapter in your life to look like? Your goals and dreams, whether they are to start a business or volunteer time, will be easier to achieve if you take the time necessary to articulate them clearly.

Next, consider what you want for your company when you step down as CEO. It is important to train future leaders if you want your business to survive after you are gone. You can avoid any potential gaps in your chain of command and make it more appealing to potential buyers by creating a succession plan. Even if the decision is made to close the doors, it’s essential to consider how you can best deal with customers, vendors, and clients.

2. Assess your retirement savings

Once you have identified your goals and dreams, you can start planning your retirement. Being your boss will show you that you must have a plan if you want to reach specific goals. As you plan your future, it is essential to have separate retirement savings. It is not a retirement strategy to invest every dollar you make in your business. Unexpected events can make even the best plans fall apart.

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You can commit to regular contributions once you have established a retirement savings account. You should start as soon as possible and increase your contributions as you approach retirement age. To ensure that your retirement plan is financially sound enough to fund your transition and maximize your retirement, consult a financial advisor.

3. Calculate your retirement expenses

You may feel more confident leaving the business if you know that your savings will be sufficient to provide the lifestyle you desire in retirement. You should project what you will spend. This includes any expected housing, healthcare, and lifestyle expenses. You can adjust your projections as you get closer to retirement if you’re still many years away. To get an idea of your financial readiness, compare your expenses with your savings.

4. Think about the income that you could earn by selling or passing on the reins

This is where you can optimize a crucial part of your nest egg. Are you willing to cash out now or wait for the sale? You might be reluctant to sell if your business has not reached its full potential. Consider hiring new leadership to oversee day-to-day operations and retaining ownership. You might consider selling your business if you aren’t sure you can (which is often the case with sole proprietors who own a large portion of the business’s value). Instead, identify assets that you could sell to make money.

5. Be prepared for non-financial aspects when you retire

You can expect to experience some emotions during the transition. It can be challenging to leave your business, significantly if you have invested a lot of time, money, and effort into building and growing it. It will take some time to adjust to your new retirement life. That’s okay. A plan can help you feel more confident about your future direction.

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Scott D. Serfass, CFP (r), CRPC (r), CDFA, CDFA(TM), CDFA(TM), CDLU(r), CHFC(r), is a senior partner at Serfass, Phillips & Associates, a financial advisory firm of Ameriprise Financial Services, Inc. He specializes in helping people to retire confidently and create a plan that will effectively share the wealth with multiple generations. He has seen many families thrive despite economic and global turmoil throughout his career. His research and experience led to his book Family Success.


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