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Created: March 3, 2025
Modified: February 26, 2025

How Can I Transition My Business Value into Money I Can Use?

Have your question answered on the Money Wisdom Question Series!

Today’s question is a crucial topic for many of our clients who are business owners or have significant assets tied up in a business: How can I convert the value of my business into income for my retirement years?

In this week’s Money Wisdom Question Series, join Nicholas J. Colantuono, CFP® as he shares what to consider when planning for the sale of a business to generate retirement income.

Understanding the Tax Implications

Deciding whether to sell or keep your business can be a difficult choice. If you choose to sell, it could come with significant tax implications, including taxes on the value of the sale. On the other hand, if you decide not to sell and pass away while still owning the business, its value now becomes part of your taxable estate. In that case, your estate would need to settle the tax bill based on the value of the business.

Transitioning to Income

Selling a business and transitioning that money into an income stream could be the largest check you ever sign. Since the money or asset is no longer tied to a retirement account, your next move is to place it into a brokerage account where it will generate taxable interest and dividends each year. Whether that money is invested in the market, earning dividends and appreciating in value, or sitting in a bank account accruing interest, you’ll be responsible for paying taxes on it.

The Importance of Long-Term Planning

In addition to succession planning, selling your business is about understanding the taxes you’ll pay on the value of that sale and then creating a long-term strategy to minimize those taxes. There’s a lot to consider, especially when transitioning from a business asset to other assets, such as cash, investments, or secure vehicles. When you sell a business, you’re converting it into assets, and you’ll need to ensure those assets continue to work as hard for you as the business did, while lasting as long as you do.

To start this process, you need a retirement income plan. With the guidance of a financial professional, a tailored financial plan can show you where you are now and how you can take appropriate action to get where you want to be.

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10-Point Retirement Checklist

Here’s a checklist of our most important things you can do, to help you retire strong. 

Information presented in our podcasts is considered current as of the created date. Over time, some information presented may become stale. We recommend you consult with your Financial Professional before making any changes based on information contained here.

Johnson Brunetti is a marketing name for the businesses of JB Capital and JN Financial.

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