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Retirement Roadmap for Business Owners

Updated: Feb 17, 2023

As a business owner, you face unique challenges and opportunities when building a financial future. This month’s posts provide insights on mistakes to avoid and steps to take when building the retirement you desire—while managing your myriad responsibilities.

Small-business owners are an essential component of America’s economy. In the United States, 99.7% of all firms are small businesses with 500 or fewer employees.

Too often, however, a small-business owner spends so much time and energy building their company that they neglect their personal financial future.

Three generations of business owners working side-by-side.
Build peace of mind alongside your growing business by having a written retirement strategy in place.

Our goal is to show business owners how to maximize the value of their companies with strategies that may also help them prepare for retirement. If you own a business it is important to work with a financial advisor to create a retirement roadmap.

5 reasons business owners delay saving for retirement.

Strategy #1: Create a Retirement Roadmap

Building, running, and growing a company is tough. Business owners have countless responsibilities and too few hours in the day. Often, in the midst of fulfilling your professional priorities, you end up putting your personal financial life on the back burner.

If you have not prepared for your retirement, you are not alone. Many entrepreneurs think growing a business is all they need to retire. However, just having a business does not automatically mean you have a retirement strategy in place. Without a documented roadmap — one that goes beyond the hope of simply selling your business or passing it to your family — you could end up pushing back your ability to retire. In one survey, 34% of respondents said that they have no retirement strategy, while 12% have no plans to retire at all. Both of which are likely short-sighted.

Delaying retirement is not always an option, though. Life often brings surprises, and you cannot always control when you will retire. For example, you may retire early because of certain challenges, such as health problems or a disability. In 2020, only 28% of retirees were very confident in their ability to cover medical expenses during retirement.

To help ensure that you can experience retirement on your terms—rather than reacting to what life or the business world throws your way—you need to proactively address these items… today.

3 steps to creating a retirement roadmap for business owners

There are 3 Steps to Creating Your Retirement Roadmap:

1. Visualize your Retirement - Where are you going and what are you doing? How much income will you need?

2. Identify your Resources - What savings vehicles do you have? Are they going to meet your needs? How should you continue saving in the future?

3. Create a Succession Plan - You have equity in your business. How will you access this? Do you know what the company is worth? Who may be interested in purchasing it?

What To Do Now

Begin by defining your ideal retirement. Clarify when you want to retire and what lifestyle you hope to enjoy.

Then build strategies to address your retirement goal. In the process of doing this you will need to determine the actions needed to fill the gaps between your current assets and the income you will need to support your desired retirement.

Finally, hold yourself accountable or hire a trusted financial advisor to assist. Do not let the busy life of business ownership keep you from staying on track toward the retirement you desire.

Final thought.

Running a successful small business requires a number of skills—from delivering your product or service to managing employees and growth. Accustomed to shouldering a vast number of responsibilities, many business owners seem to forget they do not have to do it alone.

Hiring outside help not only gives you access to experienced professionals who can apply their experience to your specific needs, but it can also save you significant time.

If you need help with your retirement roadmap, the Peak Wealth Planning team can assist.

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About the Author

Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind.

Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.


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