Retirement planning, financing questions, and succession planning can all be big distractions for business owners who need to be focused on running the business.

The Scenario:

The owner of a family business valued at about $4 million asked us to help stabilize his business cash flows and save more for retirement. He also had questions about selling the business to his son.

Additionally, his portfolio was invested heavily in dividend-focused funds, which were generating current income that he didn’t need and added to his tax burden.


We worked with the business owner’s personal and corporate CPAs to gain a more complete picture of the firm’s cash flows and the tax burden to the owner.

We recommended establishing a line of credit that was secured by the company’s accounts receivable. This helped with the seasonality and timing of the cash flows to the firm.

We provided illustrations how a cash balance plan — in conjunction with his existing 401(k) plan — would help the owner save more for retirement and defer taxes. We then worked with the owner’s 401(k) provider to integrate a cash balance plan.

We helped the owner reallocate his portfolio into tax-efficient investments and showed how his various accounts were working together to meet his objectives.

We then developed a comprehensive succession and transaction plan that minimized the financial burden to the buyer (the owner’s son) and minimized the tax impact to the owner. We designed and structured this transaction to allow the owner to retain control over the business during the succession process.


  • Managing the current income tax liability was a big key to success in this scenario.  Tax-efficient investments played a crucial role, as did asset location and the introduction of the cash balance plan to the business.
  • Separating management succession from ownership succession allowed the owner to define the terms of transitioning the leadership of the company and provided for an income stream in retirement through the sale of the business.
  • Taking a holistic look at the owner’s finances — from both a personal and business perspective — helped him define his ideal retirement goal and manage his investment risk accordingly.
  • Working with the client’s estate attorney allowed us to weave the business succession into his existing estate plan.