Retirement Planning for Business Owners: Build Freedom Beyond Your Company
Solo 401(k) vs. SEP IRA: Choose With Intention
Solo 401(k)s allow employee deferrals and profit sharing, often enabling higher contributions at lower incomes than SEPs. They also permit Roth deferrals and backdoor strategies. SEPs shine for simplicity. Run both through your projected income and headcount plans before deciding.
Cash Balance Plans for Catch-Up Power
Defined benefit and cash balance plans can supercharge tax-deferred contributions for high earners, especially in their 40s, 50s, and early 60s. They require actuarial setup and steady funding. When aligned with stable profits, they can create hundreds of thousands in annual deductions.
Valuation, Deal Readiness, and Liquidity
Clean books, accrual accounting, segmented margins, and customer concentration analysis reduce buyer discounts. Remove personal expenses, normalize owner comp, and document recurring revenue. A client who trimmed top-customer reliance from 62% to 29% added a full turn to EBITDA multiple.
Valuation, Deal Readiness, and Liquidity
Deferred payments can bridge valuation gaps, but they introduce execution risk. Negotiate clear metrics, audit rights, and control levers. Model worst-case scenarios into your retirement plan so lifestyle isn’t hostage to post-deal performance you no longer fully control.
Diversify Beyond Your Business
Pair your concentrated business exposure with a diversified investment barbell: global equities, high-quality bonds, and cash buffers. Automate contributions during strong profit years. The goal is resilience—so your retirement isn’t dictated by a single market or customer.
Diversify Beyond Your Business
Consider real estate that complements, not competes with, your business. Triple-net leases or diversified REITs can provide inflation-hedged income without operational headaches. Map lease rollovers and debt schedules against your retirement cash needs to avoid forced sales during downturns.
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Estate, Governance, and Legacy
Coordinate buy-sell terms, valuation methods, and funding with your retirement plan. Keep policies current as valuation grows. Practice a tabletop exercise with partners and advisors to reveal ambiguities before they become family or courtroom drama.
Estate, Governance, and Legacy
Align trusts, beneficiary designations, and asset titling with your estate goals. Update after life events. Consider charitable trusts or donor-advised funds to pair tax efficiency with impact. Document intent so heirs understand the why behind your decisions.