Business Owners Need a Serious Plan for Retirement

Have you thought about retirement? If you’re like most business owners, unless you’re within 10 years of the normal retirement date, you probably haven’t given it serious thought. According to recent surveys among small business owners, only a quarter of business owners1 have a written financial strategy for retirement. Post-COVID, 17% of self-employed workers2 now expect to retire later than planned or not at all. And 37% of small business owners don’t think they make enough to save for retirement.

It’s not surprising that business owners are late to the retirement planning party. Most spend the greater part of their life surviving, building, and reinvesting in their venture with the hope that, one day, it will bear all of the fruit they need. It’s not at all uncommon for business owners to forgo investing in anything outside of their business because they feel that their business is their best investment.

The problem, as many business owners discovered during and after the Great Recession, is that having all of their eggs in one basket can set them back years should the business go south. Failure to diversify their assets is the main reason why many business owners near retirement age are unprepared and, often forced into trying to sell or liquidate their business with unfavorable terms.

Getting Serious about Retirement

Business owners who are serious about achieving true financial independence need to begin thinking strategically about retirement and take the essential steps to implement a solid retirement plan at the longest possible point in their time horizon. If any of this sounds like you, then it’s time to build your plan. Here are the minimum items to consider:

  • A clear vision of life after your business. Maybe that includes keeping a role in the business, or maybe it involves a whole new venture. Having clearly defined goals and a timetable are the keys to achieving financial independence on your terms.
  • Utilization of the right retirement accounts. As a business owner, make sure you have several retirement plan options.
  • An asset allocation strategy for growth. The longer the time horizon, the greater the ability to assume more risk. With proper asset allocation and broad diversification, it’s possible to achieve stable, long-term returns.
  • An exit strategy. You’ll eventually need an exit strategy that clearly defines your objectives and the process for getting out of your business. It should address post-business financial needs, options for getting cash out of the business, tax implications, and a post-business income plan.

If you want to achieve financial independence, you need a serious retirement strategy that considers all aspects of your business and financial life. Waiting until your business is at its peak or when you think you’ll have more time to plan may prove costly. Your time is a wasting asset, so meet with an advisor today.

1“COVID-19 Impact and the Future of Small Business | SCORE.”,

2Collinson, Catherine, et al. Emerging from the COVID-19 Pandemic: The Retirement Outlook of the Workforce 22 Nd Annual Transamerica Retirement Survey. 2022.

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