The Biggest Retirement Concern We’ve Seen From Business Owners

By: Ava Clark

The Biggest Retirement Concern We’ve Seen From Business Owners

For many business owners, retirement is not simply a financial decision. Retirement is a life transition tied to years of hard work, identity, and long-term planning. While investment performance and market volatility play an important role, the biggest retirement concern we hear from business owners is uncertainty around whether everything they have built will successfully translate into lasting financial security.

Questions like “Will I have enough?”, “Can I maintain my lifestyle?”, and “What happens after I step away from the business?” tend to come up far more often than concerns about day-to-day market movements.

When the Business Is the Retirement Plan

Many business owners have spent decades reinvesting back into their company rather than prioritizing traditional retirement savings. As a result, a significant portion of their net worth may be tied directly to the business itself.

That creates a unique challenge: retirement often depends on a future liquidity event, succession plan, or business sale.

According to Principal Financial Group, nearly 40% of small to mid-size business owners do not currently have a formal succession plan in place, despite many expecting to transition their businesses over the next decade (Principal Financial Group, 2025).

This can create uncertainty around many things; the business’ future value, finding a qualified buyer, timing, tax consequences, and how to effectively generate retirement income.

Many owners assume the eventual sale of the business will “take care of retirement,” but without proper planning, the outcome may not align with expectations.

Replacing Income Can Feel Uncomfortable

Business owners are often used to steady income, control, and active decision-making. Transitioning from earning income through the business to relying on investment portfolios, distributions, or retirement accounts can feel unfamiliar.

Retirement planning becomes especially important during the years leading up to a transition, when decisions surrounding taxes, investment allocation, and cash flow can have a long-term impact.

Healthcare Costs Are Often Underestimated

Healthcare is another major concern for many high-income pre-retirees and business owners. According to Fidelity’s Retiree Health Care Cost Estimate, a 65-year-old retiring today may need approximately $172,500 in after-tax savings to cover healthcare expenses throughout retirement, and that figure does not include long-term care costs (Fidelity Investments, 2025).

Many people assume Medicare will cover most expenses, but out-of-pocket healthcare costs can still be substantial over a long retirement horizon.

For business owners who are used to employer-sponsored flexibility or comprehensive coverage through their company, this transition can come as a surprise.

Retirement Is Also an Emotional Transition

One of the most overlooked parts of retirement planning is the emotional side of stepping away from a business.

For many owners, the business represents their purpose, structure, community, and identity. After years, or even decades, of building something meaningful, retirement can feel less like a finish line and more like a major identity shift.

This is one reason many business owners choose phased retirement, consulting work, or gradual transitions instead of stopping abruptly. The process often works best when both the financial and personal sides of retirement are addressed together.

Planning Creates Flexibility

While every situation is different, one common theme remains true: clarity tends to reduce uncertainty.

A thoughtful retirement strategy should include:

·      Succession planning

·      Retirement income planning

·      Tax planning (before and after a liquidity event)

·      Healthcare planning

·      Estate and legacy planning

The earlier these conversations begin, the more options business owners typically have available to them.

Retirement is rarely just about leaving work. For business owners, especially, it is about creating the confidence that the next chapter of life will support the lifestyle, family priorities, and legacy they worked so hard to build.

If you are approaching retirement or preparing for a future business transition, now may be a good time to evaluate how your business, investments, taxes, and retirement goals fit together. Having a plan in place before a major life or liquidity event can help create greater flexibility, confidence, and peace of mind for the future.

Sources

Principal Financial Group. (2025, January 13). $14 trillion at stake: Why business owners should address succession planning and retirement together. https://www.principal.com/about-us/global-insights/14-trillion-stake-why-business-owners-should-address-succession-planning

Fidelity Investments. (2025, July 30). Fidelity Investments releases 2025 retiree health care cost estimate, a timely reminder for all generations to begin planning. https://newsroom.fidelity.com/pressreleases/fidelity-investments--releases-2025-retiree-health-care-cost-estimate--a-timely-reminder-for-all-gen/s/3c62e988-12e2-4dc8-afb4-f44b06c6d52e