Shawn Filion, Senior Wealth Management Advisor at Desjardins Groups, explains why succession planning needs to start well ahead of retirement, what goes into a solid succession plan, and the biggest mistakes small business owners make when it comes to retirement.
How significant is the coming wave of retirement of small and medium-sized business owners?
The retirement trend among our business-owner clients is significant and consistent with broader changes taking place across Canada. According to Desjardins’ economists, as of July 1, 2026, approximately 36% of Canadians were aged 50 and older, a demographic cohort that is approaching, entering, or already in retirement. The Canadian Federation of Independent Business (CFIB) reports that 76% of small business owners plan to exit their businesses within the next decade, representing roughly $2 trillion in business assets expected to change hands.
For many entrepreneurs, their business is not only their life's work but also their largest asset and a key source of retirement income. As such, retirement planning extends well beyond succession. It involves preserving business value, generating retirement income and creating a plan to transfer wealth to future generations. In today's uncertain economic environment, early planning is more important than ever.
Typically, what happens to these businesses after their owners retire?
Typically, our clients want their businesses to continue thriving long after they step away. After years, and often decades, of building a company, they care deeply about their employees, customers and the legacy they've created. For those planning to transition the business to the next generation, there's also a strong desire to position their family for long-term success.
We generally see three primary transition paths: a family transfer, a sale to a third party, or an internal succession through a management or employee buyout.
The right approach depends on the owner's financial goals, family circumstances and vision for the business. In some cases, retirement income may remain tied to the business through structured payments or financing arrangements, making successor selection particularly important.
Ultimately, a successful transition balances several priorities: protecting the owner's financial future, preserving business value and setting the business up for continued success.
If a small business owner is thinking about retiring, what steps do they need to take? And how early do they need to start planning?
We often recommend starting these conversations up to 10 years before an anticipated transition.
The first step is understanding personal retirement goals and determining how much income will be needed to support them. From there, owners should evaluate succession options, review their corporate structure and understand the tax implications of different transition strategies.
It's also important to understand what the business is worth today and identify opportunities to increase its value over time. This may include strengthening management, diversifying revenue or reducing the business's dependence on the owner.
The key message is simple: plan ahead. A business transition is not a single event but a process. The earlier owners begin preparing, the more flexibility and options they will have when the time comes.
Small business owners often have much of their wealth tied up in their business. What's the smart way to get access to this wealth to fund a retirement plan?
A client of mine said it best “my business is my retirement plan.” This statement rings true for many business-owner clients. In most cases, the value built in the business is unlocked through a sale or ownership transition.
While some transactions involve a lump-sum payment, others are structured over time. Depending on the circumstances, solutions may include vendor take-back financing, family succession strategies such as estate freezes, or arrangements that allow owners to retain income-producing assets like commercial real estate.
The right strategy depends on the owner's retirement goals, tax situation and succession plans. That's why it's important to work closely with a team that includes a wealth advisor, accountant and lawyer.
Ultimately, business owners should view their company as both an operating business and a retirement asset. Protecting and enhancing its value can help create a more secure retirement.
What is the most common mistake you see small business owners when it comes to financial planning, and how can they fix it?
The most common mistake is waiting too long to plan.
Many owners assume they have more time than they do, but transitions can happen unexpectedly due to health issues, family circumstances or an attractive purchase offer. Without a plan, important decisions often need to be made under pressure.
Another challenge is that many entrepreneurs have most of their wealth concentrated in their business. While that's often a sign of success, it can leave business owners less prepared for retirement if the business generates less value than expected or if too much of their wealth remains concentrated in a single asset rather than being diversified across a broader investment portfolio.
The solution is proactive planning. Regular discussions with a wealth manager, accountant and lawyer can help owners better understand their options, diversify wealth where appropriate and prepare for a successful transition long before retirement is on the horizon.
If someone currently owns a small business but is still a ways out from retirement, what is the most important thing they should be doing now to get themselves in a good place for retirement?
The most important thing is to start planning before you think you need to, especially in today's unpredictable environment.
Retirement is only one reason a business may change hands. Illness, family circumstances, partnership changes or an unsolicited purchase offer can all accelerate the need for a transition plan.
Owners should regularly review whether their business structure, succession plans and financial goals remain aligned with their long-term objectives. Planning ahead provides more time to strengthen business value, optimize tax opportunities and prepare for the next chapter.
Business owners should also have a clear understanding of their retirement objectives, including the income required to support their desired lifestyle, major purchases, travel plans and other goals. Equally important is determining whether the value of the business and other assets will be sufficient to fund those objectives.
A wealth advisor can help quantify these needs and develop a plan to achieve them.
Building relationships with trusted advisors early in the process can also help business owners navigate key decisions and position themselves for a successful transition and retirement.
What is the most important thing someone who is almost at retirement age or actively transitioning from ownership to retirement should be doing from a financial planning perspective?
As retirement approaches, developing a clear plan for life after the business becomes essential.
For many entrepreneurs, retirement is one of the largest financial transitions they will ever experience. Converting the value of a business into sustainable retirement income requires careful planning and coordination.
A wealth management team can help develop a roadmap that addresses retirement income needs, investment strategies, tax considerations, estate objectives and succession planning. Equally important is ensuring that the proceeds from a sale support long-term financial goals and the lifestyle the owner envisions.
The role of planning does not end when the transaction closes. A successful transition is about ensuring that the wealth created through years of hard work continues to support future goals, family and legacy aspirations.
This interview has been lightly edited for clarity and length.
