Can I Golf Every Day?Submitted by Business Owner Succession Strategies | Edina, Minnesota on August 3rd, 2021
What does your Retirement Plan Design look like?
Of course, you CAN golf every day, but is that your whole retirement plan? Well, I know some individuals that do golf six out of seven days. (They close the course Mondays!). But do you WANT to golf every day? You may think it sounds great today, as constant work leaves you feeling you just don’t have any time and in retirement, why you’ll have nothing but time! What else do you want to do and do you have a plan?
Recently, I was visiting the home of a coworker and I noticed the drums and guitars in the corner of the room. He shared with me that he used to play all the time and now he never does. He talked about how great it was making music and playing the classics, but he just doesn’t have time to do it anymore. Life has evolved. He’s parenting a toddler and has another on the way; work is ramping up, …and you know the story.
It made me think that I too, have let the tail wag the dog a little bit. I have always wanted to catch that bass. You know the one that is jumping through the surface of the river, pictured on the front cover of “Field and Stream” magazine. When am I going to catch that fish?
As a business owner myself, I know how the “every day” can get in the way of doing these things we want to do today. Business owners are often captains on their calendar, and they are good planners. This might be you on Sunday evenings - you open the calendar and see what the week ahead looks like. Is there time to fit in some golf? Is there time to go out and catch that fish? Well, there’s always retirement, right? For now, business calls!
If you could create your ideal week in retirement, what would it look like?
As an exit planner, this is a question we ask when building the exit plan. It is hard for some to think about turning off the faucet suddenly and quickly. Can you shut it down slowly? Sure, you might want to work part time for a while. I have several clients that do, they go to the cabin for four-day weekends, and mid-week, they do some form of work activity. I have on my plan to own a building on small-town Main Street- a cabin-looking place with stained logs and a green roof. I plan to open a financial planning office and keep office hours from 10 -2 on Tuesdays and Wednesdays. I imagine a wood burned sign that says, “Financial Planning, Free to All who Enter.” I want to take what I have done for business owners and share it with anybody who needs financial planning help. I’ll be wearing a plaid shirt, jeans and cowboy boots. It will be fun!
That is what I plan to do while being at the cabin during the summer. On the weekends, the kids and their kids will come up and enjoy the water toys. I’ll take time to take the grand kids, “one on one” on the back bay to go fishing and catch that bass! Spending more quality time with my family is also part of my Retirement Plan Design.
During the winters, we will go down to our place in Florida. Did you know last year, during the 90 days we were there, it rained only twice? While I still have 11 years to go in my work plan until I exit the business, we decided to get a place in FL and work remotely. I can easily fly back once a month to check on things here, or not! Our plan is to upgrade twice. We love to golf, and it would be great to have a nice course attached to the community where we live, while down there. We are excited to participate in the growth of real estate now, enjoy it now, and expand and continue the process until our exit date.
I am also looking ahead at the capital gains tax that I expect to pay when I sell my business. If all things were the same in 11 years tax-wise as they are now, I will owe my home state a sizeable check for those taxes. I am working with our CPA on how to manage that tax burden and we have decided that our plan should include ample time to become a FL resident prior to exit so that when I sell, we can avoid the state capital gains tax.
All of these things I have mentioned, are in my Retirement Plan Design. I have affixed costs and forecasted how much I will need to have in retirement income to pay for this design. Knowing that amount helps me to plan for how much I need to save and how much I need to net from the sale of my business. Knowing the net proceeds helps me to know the gross sale price I need to get to live my plan. If I know how much the business is worth today, and I know how much it needs to sell for in 11 years, that’s called the Value Gap. I have built and Exit Plan around this Retirement Plan Design that includes a business plan to fill this gap. This is what exit planning is, it is simply good business planning.
This is an example and is not representative of any specific situation. Your situation will vary.