Business owners have a special opportunity when planning for their financial future—when the time comes to retire, they can sell their business and combine those proceeds with money that they've been saving over the years in a retirement account.

However, som▨e business owners discover that when it’s time to retire, they haven’t planned carefully enough (or at all) for life after owning a business.

Unlike employees with pensions or 401(k)s, entrepreneurs need to navig🧔ate saving for retireཧment as they grow their business and plan for their exit.

They a๊lso need to develop a tax-smart retirement savings withdrawal plan that aligns with their business exit and retirement. Otherwise,𒅌 both personal and professional goals can slip out of reach.

Here's what business owners need to know to avoid common planning pitfalls and to retire on their own terms.

Set Your Retirement Goals

As an entrepreneur, understanding your personal vision for 澳洲幸运5开奖号码历史查询:retirement—whether it incorporates travel, family support, or philanthropy—makes it easier to create a financial roadmap that isn't tied enti🦹rely to a future sale of your business.

Set your 澳洲幸运5开奖号码历史查询:retirement goals based on this vision, and work toward them by ꦫboth, building your business and adding to your savings consistently.

"Many business owners overesಞtimate the value of their business and dela⭕y saving outside of it," says , founder of Silicon Beach Financial.

He says you should treat business and personal goals as “two parallel tracks.” Saving separately ensures you're retiring by choice, not because the business demands it.

, CFP and founder of WELLth Financial Planning, echoes this. "It’s paramount to have at least some separate funds not associated with the business earmarked for retirement savings," he said.

Choose the Right Retirement Account

Business owners have several powerful retirement savings options. For those running solo, SEP IRAs and 澳洲幸运5开奖号码历史查询:Solo 401(k)s offer high contribution limits with low costs and minimal administrative hassle.In 2025, individuals can contribute up to $23,500 to a solo 401(k).

“For self-employed people, an individual 401(k) is often the most attractive option," says , found🎉er of Approach Financial.

Solo 401(k)s allow you to choose between pretax and Roth 澳洲幸运5开奖号码历史查询:contributions, and even offer features like plan loans and 澳洲幸运5开奖号码历史查询:mega backdoor Roth strategies, Pritchard notes.

For businesses with employees, 澳洲幸运5开奖号码历史查询:SIMPLE IRAs and traditional 401(k)s are common. However, Diodato warns that SIMPLE IRAs have "too low" contribution limits for ambitious savers. Diodato often recommends SEP IRAs for their simplicity.

As a business owner, you'll need to evaluate and weigh the flexibility, employee needs, and contribution goals to help pick the right fit for you.

Build a Business Exit Strategy

Without an exit plan, business owner꧒s risk having toꦬ sell in a rush—or for less than their company is worth.

"Start early, ideally three to five years before exit," Stroup advises. Good exit planning includes determining a good 澳洲幸运5开奖号码历史查询:business valuation, having a clear 澳洲幸运5开奖号码历史查询:succession or sale strate✨gy, and considering your preferred timeline for retirement.

“A carefully planned exit strategy can maximize a business sale price, minimize tax frictions, and keep clients happy through a smooth and long-term transition period," says Diodato.

Whether selling to employees, a competitor, or passing the business to family, early🍒 planning creates better outcomes and more peace of mind.

𝄹 If you have questions or need guidance, work with an expert to navigate your business exit.

Avoid Tax Surprises

Selling a business an🐻d tapping retirement accounts are taxable events, but proactive planning can soften the tax b꧙low.

For example, spreading sale income over multiple years, using 澳洲幸运5开奖号码历史查询:installment sales, or st𝐆ructuring deals strategical⭕ly can lower taxes, Diodato says.

Stroup also recommends exploring 澳洲幸运5开奖号码历史查询:long-term capital gains treatment or 澳洲幸运5开奖号码历史查询:qualified small business stock exclusions where possible.

After retirement, strategic 澳洲幸运5开奖号码历史查询:Roth conversions and tax-efficient wit🌄hdrawals can help preserve more of your wealth.

If you have a 澳洲幸运5开奖号码🍸历史查询:traditional individual r🐻etirement account (IRA), which has 澳洲幸运5开奖号码历史查询:required minimum distri෴butions (RMD), take just that amount to limit your tax bill and to k🏅eep as much money as possib🙈le growing tax-deferred.

Plus, work consider working with a financial advisor to iron out the specifics, like the best age to retire, when to start collecting your 澳洲幸运5开奖号码历史查询:Social Security benefits (e.g., at 澳洲幸运5开奖号码历史查询:full retirement age, early, or at age 70) and how to avoid o🌠utliving your savings.

The Bottom Line

Retiring when you own a 🍸business isn’t just about selling at the right time, it’s about planning carefully, saving wisely, and staying flexible.

Starting building your personal retirement savings early, select the right retirement account, find an advisor your trust, and craft a clear exit strategy to help you to retire securely and confidently.