Is what I would get enough to retire on?

Most owners we hear from ask one question before any other: is selling my business enough to retire on? It is the right question, and it has a plain answer you can work out at the kitchen table. You need three numbers: what you would actually walk away with, what you spend in a year, and what other income you will have. This page walks through each one and shows the math as ranges, because a single number would give you false comfort.

We are not financial advisers and this is not investment advice. It is a way to see roughly where you stand before you talk to a fee-only planner or your CPA.

Step 1: Start with net proceeds, not the offer

The number in a buyer's letter is not the number that lands in your bank account. Before you count a dollar of retirement money, take out what you owe and what you will pay.

One HVAC owner described it this way on a trade forum: an offer of about $1.3M would net about $700K after debt and tax. That gap is normal, and it is the reason this step comes first.

What comes off the headline price:

Deal structure changes when you get paid. Kingsway, a public company, bought plumbing companies with 71% to 86% of the price paid in cash at closing, with the rest in seller notes and earnouts. Roofing owners asked their association the same questions: how much is cash at closing, how much is contingent, and what taxes hit when.

Run your own numbers in the net proceeds calculator. For the details on each piece, read how much is cash at closing.

Plan your retirement on the cash you get at closing plus payments you are confident about. Treat an earnout as a bonus until it is paid.

Step 2: Turn the money into a yearly income range

Once you have a net figure, the simplest test is to spread it over the years you expect to live on it. This ignores growth and inflation on purpose. It is not a plan, it is a gut check.

So the honest answer for this made-up owner is "somewhere between $22,000 and $34,000 a year from the sale," not "$1.3M." Many owners are surprised how much smaller that looks once it is spread out. That is not a reason to panic. It is a reason to count everything else you have.

How that money is invested, and what it might earn, is a question for a fee-only planner. We do not give an assumed return here because the right answer depends on your other assets, your health and how much risk you can live with.

Step 3: Add Social Security and your other savings

Your sale is one income source, not the only one.

Social Security. You can start retirement benefits as early as age 62, and your benefit keeps growing if you wait, up to age 70. Claiming age changes the monthly check for the rest of your life, so it is worth a real conversation, not a default. A personal my Social Security account shows your own estimate at different ages, so look yours up early and use that number, not a guess.

Other savings. Count retirement accounts, savings, and any real estate you keep. If you own the building and rent it to the buyer, that rent is income too.

Seller note payments. If you carry a note, the buyer pays you over years, with interest. Under IRS rules, an installment sale is one where you receive at least one payment after the year of sale, and you generally report the gain as you receive it. That can spread out tax, but it also means your income depends on the buyer running the business well. Ask your CPA how it applies to you.

Step 4: Plan for health insurance before Medicare

For many owners the company pays for health insurance today. When you sell, that ends. Medicare generally starts when you turn 65, and your initial enrollment window opens three months before the month you turn 65 and closes three months after it.

If you sell before 65, you need a bridge:

• COBRA. If your company plan covered 20 or more employees in the prior year, you may be able to keep the group plan for a limited time, but you can be charged up to 102% of the full cost. Whether COBRA is available after the buyer takes over depends on how the deal is structured, so ask your attorney.
• The Marketplace. Losing job-based coverage qualifies you for a Special Enrollment Period, and you can apply from 60 days before to 60 days after you lose it. Depending on income you may qualify for premium tax credits. Your income in the year of the sale may be unusually high, which can change what you qualify for, so check this with your CPA before closing.
• A spouse's plan, if your spouse works somewhere with coverage.

Get a real quote for your age and state before you sign anything, and put it in your yearly spending.

Step 5: Know when to see a fee-only planner

A fee-only planner is paid by you, not by commissions on products they sell you. That matters when the sale is most of what you own. See one when:

• the net proceeds are the largest asset you will ever have;
• you are deciding when to claim Social Security;
• a seller note or earnout is a big share of the price;
• you are 2 to 3 years from a sale and want to plan taxes before an LOI, not after;
• you are thinking about staying on after the sale to bridge a gap.

Go with your net proceeds estimate, your Social Security estimate and a year of real spending. You will get far more from the first meeting.

Common mistakes

• Planning on the headline price. Debt, tax and deferred payments can take a big bite, as the $1.3M to about $700K example shows.
• Counting the earnout as cash. Earnouts depend on future results you may not control.
• Forgetting health insurance. The gap to 65 can be several years of premiums you never saw because the company paid them.
• Guessing at spending. Pull 12 months of personal spending from your bank and card statements. Remove what the company paid for you, like the truck and phone, and add it back as a personal cost.
• Claiming Social Security by default. The age you claim sets the check for life. Look at your estimate first.
• Waiting too long to check. If the numbers fall short, the fixes (raising value, waiting, part-time work) take time. Advisers often tell trade owners to start at least three years ahead.

Questions to ask your CPA, attorney or planner

1. Based on a likely structure, what would I net after debt, fees and tax, as a range?
2. How would an asset sale versus a stock sale change my tax bill?
3. If I carry a seller note, how is it taxed, and what happens if the buyer stops paying?
4. Should I count the earnout at all in my retirement plan?
5. When should I claim Social Security, given my health, my spouse and my other income?
6. How do I cover health insurance until 65, and will the sale year income change what I pay?
7. How much can I safely spend each year from what I have, as a range?
8. If my numbers fall short, which matters more: a higher price, waiting a few years, or working part-time?

Sources

1. Reddit r/ProHVACR, Should I sell the business?
2. Salt Creek Advisory, Who Buys Plumbing Companies in 2026
3. NRCA, Questions company owners should ask before succession planning begins
4. USA.gov, Retirement
5. IRS, Topic no. 705, Installment sales
6. Medicare.gov, When does Medicare coverage start?
7. U.S. Department of Labor, COBRA continuation coverage
8. HealthCare.gov, Health coverage for retirees
9. Contracting Business, The 12 Essential Steps for a Profitable Contracting Exit Strategy, Part I