Business owners tend to ask me this as a percentage.
Should I be saving 10%?
15%?
Should I be maxing out my retirement plan every year?
I understand why. A percentage would make this easy.
But if you own a business, I don't think the right number starts with a percentage of income. It starts with a gap.
What will the life you want eventually cost, what have you already built to pay for it, and how much still has to come from you?
That's the number we're solving for. And it moves. For one business owner, 10% won't come close. For another, maximizing retirement accounts while starving the business of working capital or leaving herself no personal liquidity would be a mistake, even though it looks disciplined on paper.
The answer comes from the plan, not from a rule.
1. Start With the Retirement You're Actually Trying to Fund
Before deciding how much to save, I want to know what we're saving for.
So the question I ask isn't when you want to retire. It's when you'd like work to become optional.
That difference matters more than it sounds. Very few business owners picture one final Friday followed by forty years of not working. What they picture is selling at 60. Or keeping the business and working three days a week. Or handing off the employee management and continuing to consult. Or simply reaching the point where they only take the work they actually want.
Those are different financial problems with different price tags.
Then we need what that life costs. Someone spending $180,000 a year who wants to keep living that way is solving a different problem from someone who expects to need $80,000, even if their businesses look identical from the outside.
A savings target without a spending target is a number somebody made up.
2. Then Look at What You've Already Built, and What You'd Actually Rely On
Retirement doesn't have to be funded entirely from the accounts with "retirement" in the name. Depending on your situation there may be 401(k)s and IRAs, taxable investments, Social Security, a pension from an earlier career, real estate, cash, continuing income from the business, and potentially proceeds from selling it.
I want to see all of it. Then I want to know which parts we're comfortable depending on.
That second question matters far more for business owners than for anyone else, because one of those assets behaves differently from the rest. You may believe the company will sell for $2 million. Fine. Let's model that. Then let's also model it selling for $1 million, or not selling on your timeline, or you deciding at 58 that you don't actually want to sell it at all.
Unlike an account with a visible balance, the value of a privately held business isn't really knowable until someone is willing to pay for it. That doesn't mean leaving it out of the plan. It means not letting the whole plan rest on it.
A retirement plan gets stronger when there's more than one way for it to work.
3. What You Can Save and What You Should Save Are Different Questions
This is where contribution limits distract people.
Business owners often have access to retirement structures allowing substantial contributions, depending on the type of business, compensation, whether there are employees, and how the plan is designed. Employees complicate it further, since some structures require employer contributions for eligible participants, which changes the economics of the whole decision. That's its own conversation and worth having with your CPA in the room.
But the maximum you're permitted to contribute is not automatically the amount you should.
Before I'd point every available dollar at a retirement account, I want to know what else that money has to do. Whether you have real personal cash reserves. Whether the business has enough operating capital. Whether you're carrying expensive debt. Whether your income is protected if you can't work. Whether something large is coming.
I also don't want everything locked up. There's genuine value in personal investments that aren't tied to a retirement timeline, because they're what gives you the option to step away early, buy something, take a year off at 55, or move on an opportunity. Retirement accounts are excellent at what they do. Flexibility isn't it.
The tax benefit of putting money away doesn't make the money available again when you need it for something else.
4. Your Age Changes the Urgency
Saving 10% at 32 and saving 10% at 52 are not the same act.
Someone in her thirties has decades for contributions and growth to compound. Someone in her fifties who spent most of her career reinvesting in the business has a shorter runway, and a generic savings rule tells her almost nothing useful.
That doesn't mean she's behind. It means she needs actual numbers instead of a percentage.
And there's a genuine advantage here that gets overlooked: if you're in your peak earning years with a well-established business, those are often the years with the greatest capacity to save. A shorter runway paired with a much higher capacity is a very different situation from simply being late.
5. Your Savings Rate Will Not Be the Same Every Year
I don't expect a business owner to save an identical percentage annually, because business income doesn't work that way.
There will be years when you're opening a second location, hiring, buying equipment, recovering from a slow stretch, or deliberately keeping more capital in the company. And there will be years when revenue is strong, the business is well capitalized, and you have far more capacity to move money onto your personal balance sheet.
That's normal. What I don't want is for retirement savings to become the thing that happens only if something happens to be left over in December.
Flexible doesn't have to mean accidental. Set a target, revisit it during the year, and adjust deliberately based on what the business is actually doing.
So, What Percentage Should You Save?
If you want a universal number, I'm going to disappoint you. There isn't one.
Here's the calculation instead. Start with what you want retirement to cost. Subtract the reliable income you expect to have. Compare what's left against the assets you've already accumulated. What remains is what you need to save from here to close the gap.
Then we test it. What if you retire earlier? What if the business sells for less than you hope? What if it doesn't sell? What if you save more for five years and then ease off? What if you work part time later? What if you want to spend considerably more in the first decade, because that's when you'll actually travel?
That's planning.
And the answer can land in three places. It may tell you that you're already saving enough. It may tell you that you need to increase it substantially. Or it may tell you that you don't need to keep saving every available dollar, because you've built enough and your money could be doing something else.
All three are useful answers. The third one surprises people most.
One More Number I Watch
There's a second figure I pay attention to with business owners: how much of your net worth exists outside the business.
I don't expect the same answer from everyone, and a growing company can reasonably represent a large share of your wealth for a long time. But over the years I want to see the success you're building inside the company start showing up on your personal balance sheet.
Because the goal shifts. Early on, you're building the business. Later, the business should be building you. I've written more about that in Financial Planning for Women Business Owners.
For women business owners and professionals in San Ramon, Danville, Dublin, Pleasanton, Walnut Creek, and throughout the Tri-Valley and East Bay, that's the retirement conversation I'd rather have than telling you to save 15% and wishing you luck.
If the business is doing well but you're not sure you're saving enough to make work optional someday, that's a question we can put real numbers behind.
About Mackie Chaudhry, CFP®
Mackie Chaudhry, CFP® is the founder of Soluna Wealth Planning in San Ramon, California. Soluna provides comprehensive financial planning for women and families, with a special focus on women business owners and professionals.
Mackie helps clients bring the pieces of their financial lives together: cash flow, investments, retirement planning, tax considerations, insurance, estate planning, and the major decisions in between. Her approach is warm, organized, and judgment free.
Soluna Wealth Planning serves clients in San Ramon, Danville, Dublin, Pleasanton, Walnut Creek, throughout the Tri-Valley and East Bay, and beyond.
The examples in this article are hypothetical and provided for illustrative purposes only. They do not represent any particular individual's situation and are not intended to suggest what any person should save, spend, or expect to receive. Individual circumstances vary.
The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.
Cetera Investors is a marketing name of Cetera Investment Services. Securities and Insurance products are offered through Registered Representatives of Cetera Investment Services LLC (doing insurance business in CA as CFG STC Insurance Agency LLC), Member FINRA, SIPC. Advisory services are offered through Cetera Investment Advisers LLC. Cetera is under separate ownership from any named entity.