For many business owners, the pressures of day-to-day operations and growing a business take precedence over planning for retirement. And while other retirees will have a company pension plan or contribution matching programs to rely on, retirement savings options for small business owners require strategic planning. And the sooner you start planning, the better.

While there’s no single roadmap that tells you how to retire from a family business, the good news is there are experts who will work with you and help chart the course for a successful, enjoyable retirement. Whether your goal is to own a vacation property large enough for all the grandkids to visit, or you want to hit the open road in your motorhome for endless travel adventures, your retirement plan will ensure you’ll have the money you need to fund the retirement lifestyle you want.

We highly recommend enlisting your financial planners, accountants, and lawyers — the people who helped guide the successful growth of your business — to help guide your retirement planning. These advisors will ask some tough questions and you need to be ready for difficult conversations.

As difficult as these conversations are, it may be helpful to know that you are not alone.  A recent survey by the Canadian Federation of Independent Business found that of the 72% of business owners who intend to exit their businesses within the next ten years, only 49% have a succession plan, and only 8% have a formal written plan.

For small business owners, business exit planning and retirement planning go hand-in-hand. Our sister company, Commercial Ventures, is a full-service exit planning consultancy and business brokerage. They offer Business Exit Planning Workshops that provide an excellent opportunity to start your succession planning.

Register for an upcoming Business Exit Planning Workshop today!

How much do I need to retire?

Every good plan starts with a goal and your retirement plan is no exception. There are many variables to consider when calculating how much you need to retire. Factors include debt load at retirement, age, lifestyle goals, travel plans, etc.

This is where your financial planner comes in. They will take into consideration all sources of retirement income, including your personal savings and investments. They will also take into consideration projected inflation rates as this will help determine just how far your money will go in the future. Your financial advisor will assess your goals and your current financial situation to come up with a reasonable dollar amount you’ll need for retirement.

Armed with this information, you’ll be able to calculate when you can retire and you will have a better idea of what your succession plan should look like. You may want to continue to work for the business part-time or as a consultant to ensure a smooth transition for the new ownership and to continue to earn a salary while easing into retired life. Regardless, your retirement savings goals will help inform your business exit strategy and are an important first step in planning.

Selling your business is only part of the retirement plan

The best advice for retiring business owners is to think of the sale of your business as a means to top off your retirement savings. The sale of your business should not be the sole source of your retirement fund.

Realistically, the selling price for your business may not be what you want or need it to be so that you can retire. The marketplace is ultimately what drives the value of your business. Relying on the sale of your business to meet your retirement objectives is risky. It needs to be the cherry on top, not the entire sundae.

Retirement financial planning checklist for small business owners

While there may not be a roadmap for saving for retirement from a small business, this checklist adapted from the Financial Consumer Agency of Canada can help.

  1. Establish a retirement budget
    As your needs and lifestyle change over time, it is important to review and update your budget. This is especially important when planning for retirement when your income may be fixed or less than it was when you were working.
  2. Review and update your insurance coverage
    As a retiree, it is important to ensure that your insurance coverage meets your current needs and lifestyle particularly if you plan to travel or if your health changes.
  3. Plan for a possible transfer of decision-making authority
    No one wants to think about the possibility that their health may deteriorate such that they are no longer able to make competent financial decisions, but it is incredibly important to plan for it just in case. At some point, you may need a Power of Attorney for family members to manage your finances.
  4. Update your will
    Estate planning and having an up-to-date will are incredibly important. As your financial picture will have changed after retirement, you will need to make updates accordingly.
  5. Consider your retirement living costs
    Whether you decide to live in your current home, downsize, or purchase a snowbird property outside the country, you’ll want to consider the tax implications (if any) of your move.


It has been our experience that business sellers who have a solid exit strategy and retirement plan already in place are better positioned to successfully sell their business.

For more professional business brokerage advice, including a custom business valuation, contact an Edmonton business broker or Calgary business broker.