June Blog 2022

Jeanne Tackett |


Selling your business can provide a sense of relief. After putting in your blood, sweat, and tears, you can now reap in the benefits. However, in navigating life after selling your business, you also need to consider how selling your business has affected your finances and what to do with the profits you received. Continue reading to learn about financial moves to make after selling your business.

Maximize Your Profits

Most business owners generate a large amount of profits from the sale of their business. With this influx of cash, it’s important to know how to truly maximize these profits. One strategy to consider is converting a significant portion of the profits in pre-tax accounts to Roth IRAs. By utilizing the Roth IRA conversion method, you can put enough money into your Roth IRAs to stay below higher tax brackets. This is also a great way to catch up on retirement savings if you are not on track. Keep in mind the amount that you convert is taxable in the year of the conversion.

Properly Allocate/Invest/Manage Your Profits

Now that you have sold your business, you need to allocate/invest/manage your profits. If you received cash from the sale, you need to diversify the proceeds. You can diversify your financial portfolio with a combination of mutual funds, bonds, money market accounts, real estate, and more. Diversification is one of the best ways to overall manage your financial wealth by having your money in different industries and asset class investments.


Set Up A Charitable Donation Giving Strategy

A large financial portfolio is the perfect vehicle for a charitable giving strategy. You can have a Donor Advised Fund established in the year you sell your business. It is most beneficial to you in the year of sale because if you make a significant donation in the year of sale, your large donation will offset your ordinary income taxes.


Know Your Health Care Options

Most business owners sell their business prior to turning 65, meaning they are not eligible for Medicare yet. If you previously used an employer-sponsored plan through your business, you will now have to find health insurance on the open market. However, these open market insurance plans can cost thousands of dollars a year. A financial advisor will be able to help you find a comprehensive health insurance plan that works for you and is affordable.


Plan For Your Family’s Future

Now that you have received the profits from the sale of your business, you need to update any estate planning you previously had in place. A few items to update or create include:

  • A will decide how your assets and property are divided up after you pass away.
  • A living will to state your medical & health care wishes and a power of attorney in the event you are incapacitated.
  • Add beneficiaries on your life insurance policies and update any beneficiaries to make sure your wishes will be followed.
  • Form trusts to maintain better control over your assets when you pass away and allow your loved ones to avoid the probate process.

If you are in the process of selling your business or recently sold your business, it’s important to have a financial advisor that is looking after your personal finances. Our advisors at Total Clarity Wealth Management are here to help. Schedule a consultation with us today.








Information in this material is for general information only and not intended as investment, tax or legal advice. Please consult the appropriate professionals for specific information regarding your individual situation prior to making any financial decision. No strategy success or protects against loss. Investing involves risk including loss of principal. LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax.