The Retirement Crisis for Business Owners: Why You Can’t Afford to Delay Saving

For business owners, the dream of building something lasting often becomes all-consuming.

The hours, years, and capital you’ve poured into your company are unmatched. It’s your livelihood, your legacy, and sometimes—if we’re honest—your identity. But as you dedicate yourself to growth, there’s one question that too often lingers unanswered: Will you be financially secure when it’s time to retire?

The truth is many business owners aren’t prepared. A survey by SCORE reveals that 34% of small business owners have no retirement savings plan outside their company. Even more troubling, 40% rely on selling their business to fund retirement—a risky bet that assumes the market, buyers, and timing will align perfectly.

The stakes are high, and the risks are real. Here’s why you can’t afford to wait—and how you can take control of your future now.

Why Business Owners Struggle with Retirement Planning

1. Reinvesting in the Business

It’s easy to see the company as your best investment. Profits are often reinvested into expansion, staffing, or new ventures—creating growth but leaving little for personal savings. While this strategy might accelerate success, it also creates dangerous dependence on your business as your sole safety net.

2. An Uncertain Exit Strategy

Planning to sell your business? The odds may not be in your favor. According to the Exit Planning Institute, only 20% to 30% of businesses listed for sale actually sell. Factors outside your control—market downturns, declining industries, or lack of buyers—can turn a “sure thing” into a setback.

3. Overconfidence in Business Value

Many owners overestimate their company’s worth. A 2023 UBS study found that 48% of owners haven’t had their businesses professionally valued. Without an accurate picture, you may be banking on a figure that won’t hold up when it matters most.

The Risks of Betting Your Retirement on Your Business

• Market Volatility: Economic downturns or shifts in industry trends can significantly devalue your business.
• Health Challenges: Illness or injury could force you into early retirement—well before you’ve executed a plan to sell or pass down the company.
• Liquidity Issues: Even profitable businesses don’t always produce steady cash flow. Income swings make saving and planning exponentially harder.

Simply put: Good businesses don’t always guarantee good retirements.

How to Take Control of Your Financial Future

1. Start Saving—Now

If you’re not saving yet, the time to begin is today. Compound interest is your greatest ally, and even modest contributions can grow exponentially over time. Options like a SEP IRA, 401(k), or SIMPLE IRA allow you to save while gaining significant tax advantages.

2. Diversify Beyond Your Business

Your company might be your greatest asset—but it shouldn’t be your only asset. Build a safety net by diversifying with personal retirement accounts, outside investments, or real estate. A well-rounded portfolio adds stability and reduces risk.

3. Get a Professional Valuation

Do you know what your business is worth today? A professional valuation provides clarity and helps you set realistic expectations for succession planning or a future sale.

4. Document Your Exit Plan

Hope is not a strategy. Whether you plan to sell, merge, or pass the business to family, a clear exit plan is critical. Work with trusted professionals—your CPA, attorney, and financial planner—to keep the strategy aligned with your goals as your business evolves.

5. Collaborate with a Financial Advisor

A skilled advisor can bridge the gap between your business and personal finances. They’ll help you structure retirement savings, manage tax-efficient strategies, and ensure your vision for the company translates into financial security.

Your Business Is Your Legacy—But It’s Not a Retirement Plan

Business owners are natural optimists. You’ve succeeded because you see opportunity where others see risk. But when it comes to retirement, hope alone isn’t enough.

You owe it to yourself—and the legacy you’ve built—to plan for a retirement that’s as intentional as your success. Start small, take deliberate action, and work with experts who can help secure your future.

The best time to prepare was yesterday. The second-best time is today.

Are you ready to safeguard your retirement? Let’s build a plan that works—before time and opportunity slip away.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional. Any opinions are those of Justin Williams and not necessarily those of Raymond James.