Funding your retirement income from your business depends on a number of factors, so it takes a systematic approach to make it work. I will cover some of the main points to consider to have a reliable retirement income.
The first question to answer is what is going to happen to your business in retirement? Are you going to be involved in running it, either on a full or part time basis? Do you want to maintain full or partial control of the business? Are there key employees or family members that you want to run or buy the business? How long will a full or partial sale of your business take? What is the value of your business, can it currently generate a cash flow to meet your expectations? For many business owners, most of their assets outside their home and possible vacation property are tied up in their business.
If you are planning to sell your business to a third party and move on, things should be fairly simple once the deal is done. Congratulations if Microsoft made your business an offer you couldn’t refuse. Then your only question is, “do I have enough money to retire on”, after the taxes and expenses are paid? I will address how much money it takes to retire in another post.