How to Develop a Retirement Exit Strategy That’s Right for You


Are you ready to retire? Have you planned for your retirement exit strategy?

Many business owners don’t have a plan for what will happen when they retire and leave their businesses. This can lead to difficulties in the transition and cause the business to fail. Retirement planning is an integral part of any successful business. This is why Business Succession Planning is so important.

A successful retirement exit strategy begins with developing a succession plan. Several options are available for retirement exit strategies The best choice for you will depend on your business’s specific situation and personal goals.

The most common types of Business Succession Plans are:-

1.  Selling Your Business To A Co-Owner

Suppose you and your partners own your business together. In that case, you should consider drafting a mutual agreement that sets out the terms and conditions for selling a deceased or disabled owner’s business interest. This can help avoid future disputes and ensure a smooth transition for the business.

One key advantage of this plan is that it allows the co-owner to buy out the shares of the deceased or disabled owner without delay. However, the critical drawback of this plan is that the co-owner requires much cash on hand since he would be prepared to buy out your shares theoretically at any time.

A buy-sell agreement is one way to overcome a co-owned business’s key drawback. A buy-sell agreement is a contract between company co-owners that spells out the terms for when one owner wants to sell their shares, and the other wants to buy them. This can be a beneficial tool for businesses, as it can help avoid conflict and ensure a smooth ownership transition. In addition, most businesses will fund this buy-sell arrangement with life insurance since life insurance is relatively inexpensive and can offset the costs of a buy-sell agreement. 

2.  Passing Your Business To Your Heir

When choosing an heir to take over your business, there are a few things you’ll want to keep in mind.

  • First, is your heir ready and willing to take on the responsibility?
  • Second, is your heir capable of running the business?
  • And third, is your heir the right person for the job, both from a skill and character standpoint?

If you can answer yes to all of these questions, passing your business on to your heir is likely the best course of action for you and your family.

When making business decisions within a family,  keeping emotions in check is essential. Unfortunately, this is easier said than done, especially after an untimely death or disability. Studies show that second-generation businesses rarely survive the transition, as they’re often sold by the inheriting family member or fail outright.

3.  Selling Your Business To A Key Employee

A key employee is a good option for a business succession plan since the employee is generally more reliable than an outside buyer and is more committed to continuing the business’s success.

In a perfect world, the owner of a company would have a clear succession plan that seamlessly transfers ownership to the most qualified and deserving employee. But in the real world, many business owners don’t have plans. Money is often the biggest hurdle when it comes to key employee succession. Most employees aren’t financially able to buy the business they work for.

One solution to this problem is an employee stock ownership plan (ESOP). An ESOP is a retirement plan allowing employees to own a piece of the business they work for. The company makes contributions to the ESOP, which are used to purchase the company’s shares. Employees can then withdraw or cash the shares when they leave the company.

4. Selling Your Business To An Outside Party

You may have to sell your business to an outside party when there isnt’t an obvious successor. Ideally, it would be best to get an updated valuation of your business to ensure that you get the best price.

When it is time to sell your business, you want to ensure everything goes as smoothly as possible. But, unfortunately, you can’t predict precisely what the sales process will have in store. For example, your business may not be as valuable as you have anticipated, there may be a lack of credible buyers, or your business may not be able to sell at all. Therefore, weighing essential to weigh your options and considering the potential drawbacks before selling your business is essential.

No one ever plans to fail, but failure to plan leads to most business failures. No one knows when their time will come, but having a good succession plan in place can ensure a smooth transition of your business when the time does come.

A succession plan can help transfer ownership of the company to another individual, maintain your lifestyle in retirement, provide for your heirs financially, and prepare the business to handle unexpected events.

If you don’t have a succession plan, it’s essential to start developing one now to ensure a smooth transition for you and your business.

You’ve spent your life building your business, but you’re not sure what will happen to it when you retire. Speak to us over video consultation via Lawyer Anywhere for advice on planning your retirement exit strategy.

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Susan Tan

Senior Legal Executive


With more than 10 years of experience in the financial industry, Susan Tan, who joined us from one of the leading corporate and investment banks in Singapore, provides invaluable expertise and knowledge in corporate secretarial.

She is conversant and familiar with the local regulations and requirements for business entities in Singapore.

As a member of our team, Susan is responsible for maintaining and updating the Company’s statutory registers and records, filing all necessary documents and forms with the Accounting & Corporate Regulatory Authority (ACRA), Ad-hoc assignments such as allotment and transfer of shares, amendment of Company’s Constitution and submission of Annual Return to ACRA.

Apart from corporate secretarial work, Susan has considerable experience and expertise in compliance advisory matters, making her a valuable member of our firm.