How Much Do You Need from the Sale of Your Business to Retire Comfortably?

Mark Hegstrom

July 25, 2025

Your Business, Your Retirement Nest Egg

For many business owners, your company isn’t just your livelihood—it is your retirement plan. You’ve spent years, maybe decades, building it. It’s been your source of income, your biggest investment, and in many cases, your legacy. But when it comes time to step away, will the sale of your business be enough to fund the next phase of your life?

We’ll help you start thinking about your number—the amount you’ll need from the sale of your business to confidently support the lifestyle you envision in retirement.

Why You Need a Number—And Why It’s Different for Every Owner

When it comes to retirement planning, there’s no universal target. One owner might dream of retiring to a quiet lake home, while another hopes to travel the world or fund generational wealth for their family. That’s why knowing how much money you need from your business sale to retire requires careful, individualized planning.

Your “number” depends on several personal factors:

Your desired retirement age

Your post-retirement lifestyle and goals

Family obligations (education, caregiving, legacy planning)

Your location and cost of living

Any existing retirement savings or outside income streams

Common oversights can seriously impact your planning. Many owners forget to account for:

Taxes on the sale of the business

Rising healthcare costs in retirement

Longevity risk—you might live (and spend) longer than you think

Failing to calculate accurately could mean running out of money too soon—or working longer than you’d like.

Understanding the True Value of Your Business

Here’s something most owners don’t realize: your business may not be worth what you think it is.

That’s why receiving a formal business valuation from an accounting or specialized valuation firm is one of the most important steps in retirement planning. Several key factors affect the value of your business:

Earnings (especially EBITDA—earnings before interest, taxes, depreciation, and amortization)

Industry trends and market conditions

Customer diversity and recurring revenue

Your role in the business (if you’re too central, that can lower value)

Business structure and financial documentation

Understanding what your business could realistically sell for—today or five years from now—is essential to calculating whether it will support your retirement plans.

Aligning Your Exit Plan with Your Retirement Goals

Too often, business owners separate their exit plan from their retirement plan—and that’s a big mistake. Your exit strategy is one of the most powerful tools you have to shape your financial future.

Timing matters. Exiting during a market downturn, rushing due to health issues, or selling because of burnout can all negatively affect your outcome.

Let’s look at two examples:

Owner A built a successful business but never planned an exit. At 65, burnout set in, and they accepted the first offer that came along—one that didn’t cover their post-retirement budget. They’re now scaling back their lifestyle and working part-time.

Owner B started planning early. They had their business valued by a firm specializing in valuation services, worked with advisors to reduce taxes on the sale, and made a clean transition at 63—retiring with confidence and the financial freedom to enjoy life on their terms.

The difference? Planning.

Hypothetical examples are not representative of any specific scenario. Your results may vary.

How to Calculate Your Number

Now to the big question: how much money do you need from the sale of your business to retire? There’s no magic number—but there is a process.

Here are the major factors to consider:

1. Retirement Budget

Start with your desired lifestyle: travel, hobbies, housing, healthcare, and more. Don’t forget to account for inflation and potential long-term care needs.

2. Other Income Sources

Do you have IRAs, a 401(k), rental properties, or other passive income? The more diversified your retirement income, the less pressure you’ll place on your business sale.

3. Retirement Age and Longevity

A 55-year-old retiring early may need their assets to last 30+ years. The later you plan to retire, the shorter the time your money needs to stretch—but you’ll also need to weigh health and lifestyle desires.

4. Taxes

The sale of a business often triggers capital gains taxes—and in some cases, income taxes. Structuring the sale wisely (e.g., asset vs. stock sale) and planning with a CPA can make a big difference.

Working with a financial advisor or wealth planner can help you model multiple scenarios and determine what size of sale will support your retirement needs.

The Bottom Line: Don’t Wait Until You’re Ready to Sell

Here’s the truth: you don’t need to be ready to sell today—but you do need to know what you’ll need tomorrow.

Too many business owners wait until they’re burned out, forced to sell, or facing health issues before they begin planning. That’s when tough choices and regrets show up.

But with proactive planning, you can:

Set and reach your financial goals

Increase the value of your business over time

Exit on your own terms

Retire with clarity and peace of mind

Are you on track to retire from the sale of your business?

Whether retirement is around the corner or still a decade away, knowing your number is the first step toward a secure and fulfilling next chapter.

Reach out today to start the conversation about your exit strategy and retirement plan. We help people figure out and work toward their number every day and are here to help you make smart, confident decisions.