Retirement gap calculator
Put in what the sale might leave you after tax, your savings and what you spend. See how long it lasts, the yearly gap and three ways to close it.
Free, no email, your numbers stay in your browser unless you email them to yourself.
Is it enough?
On these numbers, it depends: the better case covers your plan, the worse case falls short.
- Yearly income it supports
- $69K to $102K
- $33K to $66K from your money plus $36K of other income, for 25 years.
- Yearly gap
- Up to $11,400
- Worse case: $11,400 short a year. Better case: $22,200 to spare a year.
- Years the money lasts
- 18 years to 60 years or more
- Taking $44K a year, what you spend minus your other income.
You would have $815K to $1.03M to live on. You need $44K a year from it after your other income. Paid out evenly over 25 years at a 0% to 4% return, it supports $33K to $66K a year.
Three ways to close the gap
- Raise what the business is worth. About $285K more after tax from the sale would cover the worse case. See what to fix first.
- Wait a little longer. If you work 2 more years and leave this money alone, the worse case becomes $8,600 short a year.
- Work part time. About $11,400 a year of part-time income, or consulting for the buyer, would cover the worse case.
This is arithmetic, not investment advice. Talk to a fee-only planner before you decide when to sell or how to invest the money.
How we got there
- Money to live on = $515K to $734K + $300K = $815K to $1.03M
- Needed each year = $80K - $36K = $44K
- Yearly income it supports over 25 years at 0% to 4% = $33K to $66K
- Yearly gap = $44K - yearly income = $11,400 short a year (worse case) to $22,200 to spare a year (better case)
This is an educational estimate, not an appraisal. RetireFromTrades gives an illustrative range based on what you told us and on general market information. It is not a formal business valuation or appraisal, and it is not an offer to buy your business. We are not a business broker, M&A adviser, CPA, lawyer or financial adviser, and nothing here is legal, tax, accounting or investment advice. Real offers depend on your actual financial records, buyer diligence, deal terms and market conditions, and can be higher or lower than this range. Before you make any decision, talk to a licensed professional. If you ask, we can introduce you to an independent licensed business broker; we do not broker, negotiate or take part in any sale.
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How this works
The formula
- Money to live on = after-tax sale money + other savings
- Needed each year = yearly spending - other yearly income (Social Security, pension, rent)
- Yearly income it supports = money to live on, paid out evenly over your years at the return you assume
- Yearly gap = needed each year - yearly income it supports
- Years it lasts = years until the money runs out if you take what you need each year
The assumptions
- The return is after inflation and starts at 0% to 4% a year. 0% means the money only keeps pace with prices. These are assumptions to replace with a fee-only planner's numbers.
- Spending is what you need each year at today's prices. Income tax on withdrawals is not modeled, so include it in your spending if you can.
- We assume the money is paid out evenly and runs out at the end of your years. Health insurance before Medicare and big one-off costs are up to you to include.
- The wait lever assumes you live off the business while you keep working and leave the sale money and savings to grow at the low return.
- The example numbers are made up. Replace them with yours.
Sources
- How we build our numbers, and what we have not verified: our methodology.
Next step
If I sell for $X, what do I actually walk away with?
Net proceeds calculator
Headline price in, cash at closing, later payments and an after-tax range out.
Read more