How Can A Cash Balance Retirement Plan Help Attain My Exit Goals?

If your goal is to exit your business at some point in the next ten years, you should answer these questions as soon as possible:

  • When in the next 10 years do I want to leave or exit?

  • How much $$$$ will I need (net of taxes) to do everything I want to do after the business?

  • To whom do I want to sell the business…third-party, insiders, children/family, ESOP?

  • Is my business sellable? For how much?

  • What is my plan for life after the business? (Most owners are miserable within two years of exit because they didn’t have a post-exit life plan).

You may decide to head down one of the following paths once you thoroughly answer these questions and others like them:

  • Over the next ten years you decide to work hard to maximize the sellable value of your business (having a goal of selling for top dollar in the next 10 years), while at the same time accumulate as much $$$$ outside of the business as possible — in order to maximize your exit route options.

  • After learning that you would need to invest much more time and money for your company to be sellable, and decide that you don’t have the energy for that, you might also decide that simply “closing the doors” and liquidating for asset value in 5 years will be your exit strategy — but in the meantime you will , “sock away” as much $$$$ as you can in savings and investments outside of the business.

  • Maybe you have a professional practice (i.e, Attorney, Dentist, M.D., etc.) with neither a clear successor option or potential buyer, and you definitely want to exit within the next 5 years.

In all of these scenarios and others like them, where the owner wants to maximize savings outside of the business, a Cash Balance Retirement Plan could be an effective tool, if certain parameters are met, in accomplishing that objective.

A Cash Balance Plan is an IRS Qualified Retirement Plan that affords participants the ability to accumulate money for retirement in amounts well beyond the 401k and Profit Sharing contributions. If your comprehensive plan for exit includes maximum asset accumulation outside of the business, you should consider the pros and cons of a Cash Balance Plan and how it might serve in accomplishing your goals. If you need help contact us. You can also access further information by listening to our latest ExitReadiness® PODCAST with guests Financial Advisor Erik Fromm and Retirement Specialist Les Risell of Janney Montgomery Scott.

And for a FREE assessment of your business sellability and personal exit readiness, please contact us today at