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posted: 12/9/2013 5:00 AM

Plan to sell the business to fund retirement? Plan long-term

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Planning matters for entrepreneurs starting up. It turns out, however, that planning may matter even more if you're nearing the other end of the spectrum and looking at retirement.

"It's never too late to plan for your retirement years," says Art Littlefield, "but it's better to start planning sooner as opposed to later."

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Littlefield is a private wealth adviser and president of the Financial Strategies & Solutions Group, Naperville. He'll help with ways to structure your departure from your company, everything from buy-sell agreements to the tax impact of selling the business, but there are two related topics Littlefield most wants to discuss: A growing-older entrepreneur's retirement income needs and the length of time retirement dollars must last.

Littlefield seems genuinely bothered by what he perceives as a general lack of awareness that a business owner celebrating birthday 65 may have a great many retirement years to fund.

Life expectancy calculators at the Social Security Administration website indicate that a man turning 65 today can expect to live, on average, until age 84. A woman turning 65 today can expect to live, on average, until age 86.

Happy birthday. Hope you've set aside some money.

The SSA raises other life span issues, too: About one of every four 65-year olds will live past 90. One in 10 will live past 95.

Hope you've set aside lots of money.

"It can be hard to fathom that 'I have 20-30 years to go,'" Littlefield says.

Littlefield, of course, makes his living helping families and individuals corral money that hopefully will last those 20-30 years. Like others in his profession, he suggests that business owners should "start planning (for retirement) 10 years out."

Starting that early is unusual, however, and "75 percent (of us) have no plan," says Littlefield. "We have to think about retirement."

For example, Littlefield continues, "You really do need to know what your income needs will be in retirement, (but) most of us don't know" how many retirement dollars we should have.

Rising health care costs, long-term care expenses and even ordinary everyday living can add up. A Consumer Reports.org February 2011 summary suggests that as many as half of today's 65-year olds "will probably need nursing home care in the future."

Many business owners traditionally have anticipated that the sale of their business will fund retirement, but selling a business isn't a slam dunk:

• If you're a manufacturer's rep, "A whole lot of reps sell what you sell," Littlefield notes. That can diminish your business' worth.

• In fact, you might need a business valuation specialist to establish a price for your business. "You may think the business is worth $10 million," Littlefield says. "The marketplace may say $6 million." Consequently, Littlefield adds, a seller may want to find a "relational adviser who has lots of contacts to help sell the business."

Jim Kendall welcomes comments at his new email address, Jim@kendallcom.com. 2013 Kendall Communications Inc.

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