Running a business often involves a different path to retirement than working for someone else. Business owners may need to create their own retirement strategies, sometimes blending personal assets, retirement savings accounts, business value, and income planning. The right approach can depend on your business structure, goals, and how involved you plan to be in the company if the business sells.
This blog explores general considerations for business owners thinking about retirement, including potential income sources and steps that may be part of the transition out of full-time work.
Retirement for Business Owners: What Makes It Different?
Retirement for business owners isn’t always about reaching a certain age and stepping away entirely. For some, it may involve selling the business or passing it down to family. Others might continue working part-time or maintain ownership while delegating daily operations.
Here are a few key differences business owners may encounter:
- Income Planning: Business owners may rely on 401(k) contributions, investment accounts, real estate, or the proceeds from selling their business.
- Taxes: How your business is structured—sole proprietorship, partnership, S corp, or C corp—may affect how income is taxed1.
- Healthcare: You may need to plan for healthcare coverage, especially if you retire before becoming eligible for Medicare.
Key Considerations Before Retiring
The process of transitioning out of your business may take years to plan, depending on how and when you want to retire. While each situation is different, some general steps may include:
- Valuing the Business: Knowing what your business is worth can be helpful, whether you plan to sell it or pass it along.
- Creating an Exit Plan: This might involve training successors, finding a buyer, or arranging for a gradual transfer of responsibilities.
- Revisiting Tax Strategy: Making major financial moves in your business may have tax implications, so it may be worth revisiting your financial plans and goals as you get closer to retirement.
If you’re looking to retire gradually, partial retirement may be an option—stepping back from daily operations while maintaining some involvement or revenue share. Flexibility is often a benefit of being your own boss, though it may also require more planning on your part.
Retirement planning as a business owner may be complex, but it can also open up unique opportunities. Contact us today to learn how we can help you live retirement boldly and on your terms.
Citations:
- Choose a business structure, SBA.gov, June 19, 2025
Investment advisory services are offered through Vantage Point Financial, a registered investment adviser. Registration with any regulatory body does not imply any particular level of skill. This material is provided for informational purposes only and should not be construed as investment, tax, or legal advice. Working with a financial planner does not ensure financial success or prevent loss. All investments involve risk, including the possible loss of principal. Past performance does not guarantee future results. The scenarios presented are hypothetical and are intended for illustrative purposes only. They do not reflect actual client results and are not guarantees of future outcomes. Individual results will vary. Certain financial strategies may offer tax advantages, but outcomes depend on individual circumstances and are subject to change due to tax laws and other external factors. Vantage Point Financial does not provide legal or tax advice. Consult a tax professional. Retirement outcomes depend on a variety of factors, including individual savings behavior, market performance, health events, and other considerations. Certain statements herein may reflect the firm’s current views, expectations, or beliefs, which are subject to change without notice. For additional information about our services, fees, and disclosures, please refer to our Form ADV Part 2A, available at https://vantage-point.mwdevsite.com or upon request at no cost.
