Self-Employed Retirement Strategies: Why Your Exit Plan Deserves a Strategy of Its Own
After years of working with self-employed professionals and entrepreneurs, I’ve noticed a consistent pattern: most traditional retirement advice doesn’t fully apply to business owners.
Your financial journey—and your retirement—looks different. So should your strategy.
Your Retirement Looks Different—So Should Your Plan
📈 Your Business May Be Your Biggest Asset
For many entrepreneurs, the business isn’t just a career—it’s the single most valuable component of their net worth. Yet too often, exit planning is delayed until it’s too late to fully capitalize on its value.
Take one hypothetical case: a professional services provider assumed she’d simply “close the doors” when the time came. But with strategic planning, we helped her reposition the business as a salable asset—ultimately unlocking real retirement value from decades of effort.
⏰ 3 Years Out: Critical Planning Window
If you’re within three years of retiring or selling your business, this is the time to act. Key steps include:
- 📄 Documenting your core processes and workflows
- 📁 Organizing and segmenting client relationships
- 💵 Building and showcasing recurring revenue streams
- 🔄 Making your business transferable to someone else
🔑 The Tax Strategy Too Many Miss
Many self-employed professionals overlook retirement plans that can offer substantial tax advantages. In a hypothetical scenario, one client paired a Solo 401(k) with a defined benefit plan and was able to contribute over $150,000 annually to tax-advantaged accounts in her final working years.
The key takeaway? These strategies exist—but often go underutilized without proactive guidance.
💰 From Business Income to Retirement Income
One of the hardest transitions for business owners? Replacing variable income with a sustainable, predictable income stream in retirement. That’s why we use a tiered approach called the Retirement Income Cascade:
- Level 1: Core living expenses covered by guaranteed income sources (e.g., Social Security, pensions, annuities)
- Level 2: Lifestyle spending funded by investments
- Level 3: Discretionary expenses supported by consulting, part-time work, or business cash flow
🏥 Healthcare Planning: Often Overlooked, Always Essential
Without corporate benefits, healthcare becomes one of the most critical—and commonly underestimated—retirement concerns.
A few smart moves:
- Maximize contributions to your HSA during your final working years
- Build a dedicated healthcare fund to help cover premiums and out-of-pocket expenses in retirement
- Explore healthcare bridge options if retiring before Medicare eligibility
📊 A Real-World (Hypothetical) Outcome
One client assumed her boutique consulting firm wouldn’t be attractive to buyers. But by starting three years early, she:
- Built documented systems that made the business attractive to successors
- Maximized tax-deferred savings during peak income years
- Created multiple income streams for retirement
- Secured dedicated healthcare coverage
- Ultimately sold the business for a multiple that exceeded her original expectations—an outcome made possible by early planning and strategic execution
This is a hypothetical example for illustrative purposes only. Individual results will vary and are not guaranteed.
🤔 Questions to Ask Yourself
- When was the last time you valued your business?
- Are you maximizing all available tax-advantaged savings vehicles?
- What would happen to your business if you retired tomorrow?
If you don’t have clear answers, it may be time for a more strategic approach.
🎓 Learn More: The Retirement Money Prism Webinar
We’ve put decades of experience into a free, educational session designed specifically for self-employed professionals: the Retirement Money Prism Webinar.
In this live session, you’ll learn how to:
- Structure your retirement income for flexibility and sustainability
- Coordinate tax-smart withdrawals and asset liquidation
- Evaluate your advisor’s plan—or build your own
Register now by clicking the blue button on this page or visiting:
https://www.whalenfinancial.com/webinar
Participation in the webinar does not establish an advisory relationship.
