Selling my business to fund my retirement

When the sale has to fund your retirement, start from the number you need to live on, not the number you hope the business fetches. Estimate your after-tax proceeds, compare them to your retirement need, and identify the gap early; closing it usually takes two to three years of work on the business, which is exactly the runway good exit planning gives you.

The headline price is gross. Federal long-term capital gains run roughly 15-20%, plus your state's tax. Higher earners can also owe the 3.8% net investment income tax, but it generally does not apply to gain from a business you materially participate in, so many owner-operators land nearer 20% federal. How the deal is papered matters too: asset sales are usually taxed less favorably to the seller than stock sales. If you sell through a traditional broker, factor an 8-12% commission on top.

Just as important, you rarely get the full price in cash on closing day. A typical private-equity deal pays 60-80% cash at close, with the balance as rollover equity, a seller note, or an earnout that depends on future performance. That structure affects retirement planning directly: the deferred portion arrives later and carries some risk, so do not assume the whole sticker price funds day one of retirement. A full sale process also takes roughly 6-12 months from start to close.

To maximize what actually reaches your retirement account, push for a higher cash-at-close percentage, reduce owner-dependence so the business is worth more and easier to transfer, and get tax advice before signing the LOI. DealSeam introduces owners to qualified buyers where there is a fit and earns a buyer-paid success fee, so sellers pay nothing; it is not a traditional business broker, and it does not guarantee a buyer, a price, or a sale.