A phased retirement for a business owner ‘not ready to let go’  

By Noushin Ziafati | August 12, 2025 | Last updated on August 12, 2025
6 min read
Young saleswoman selling product or service to a senior couple.
Photo credit: imtmphoto

Neither Angela nor her husband Harold (not their real names) were ready for an early retirement. At 61 and 58, respectively, both are successful business owners. They’re secure financially but before now, weren’t ready to commit to an exit plan. 

“She said, ‘If your husband is retiring, what about you?’” Angela recalled from their conversation this past spring. “It’s something I’ve never thought about before, because my initial response was, ‘You don’t retire from something you love.’”  

This is the first in a series of articles focused on how financial advisors are working with clients to create retirement plans tailored to their individual needs.   

  • The expert: Thuy Lam, an advice-only certified financial planner with Objective Financial Partners in Markham, Ont
  • The client: Angela, a 61-year-old woman and owner of both a non-profit business and a for-profit business in Ontario

Harold was the first to engage advisor Thuy Lam on the subject. She then turned her attention to Angela. 

Lam encouraged Angela to embrace retirement. The two ultimately landed on a five-year phased approach, giving Angela enough time to create a succession plan she feels comfortable with and to mentally prepare for the transition.  

“I’m working on putting pieces in place so we can continue to have the impact that we’ve been having,” Angela said. 

The changing nature of retirement

The average Canadian retirement age was 65.3 years old in 2024, according to Statistics Canada. That figure reflects an ongoing trend toward later retirement that started to take shape in the 2000s. A ban on mandatory retirement, increased longevity, the increasing cost of living and a desire for continued participation in the workforce are some of the forces behind this trend, which has seen many Canadians either opting for a phased retirement, coming out of retirement to work or structuring their plan to allow them to work later in life.   

Lam asked several probing questions to get Angela thinking about the right approach for her. 

For one, she asked how she planned to spend retirement alongside her soon-to-retire husband, encouraging her to reflect and rediscover her interests and passions in this next phase of life.   

“It’s about creating that space for clients to get them to a point where they’re psychologically, mentally ready,” Lam said. “And it makes for a successful retirement.”  

Angela said she sees them spending more time with their two grandchildren, at their cottage, travelling overseas, finding ways to give back to their community and riding around on her husband’s motorcycle, which has been sitting around collecting dust. 

Lam also asked Angela if she envisioned herself continuing in the same roles and in the same capacity in her businesses once she retired, or if she could see herself gradually taking steps back.  

It was clear that Angela “does see herself significantly reducing hours of when she’s involved, but she’s not ready to let go … entirely,” Lam said.   

Based on that revelation, they built a plan that would see Angela shift from working at 100% capacity to 60%, then 30% and then 10%. During this transition period, she plans to delegate more responsibilities to her staff and identify her desired successors. By the end of the five years, she hopes to work for the businesses strictly in an advisory capacity and to retain some equity in her for-profit business to partially fund her retirement.  

Angela called it “a mental preparation more so than a financial preparation.”  

This is common, Lam said, among business owners who have the financial means to retire but view their businesses as “their babies — they started it from scratch and they just love what they do and they feel responsible for the team and responsible for having that business plan in place.”  

The numbers  

Behind the scenes, Lam compiled a full financial picture of where Angela and her husband stand. This included their assets, liabilities, expenses, incomes, tax returns, group benefits and Canada Pension Plan contributions. 

“I find when people are transitioning into retirement, they’re not confident, because … they don’t even know how much they need to spend to fund that retirement life they envision,” she said.  

The first exercise for Lam was updating Angela and her husband’s current spending needs, including their base and variable expenses.  

Lam then created a separate set of capital projections to determine their cash flow needs based on their vision for retirement, which includes local and international travel.  

She also accounted for extraordinary expenses that would continue into the couple’s retirement, such as car replacement, home renovations, as well as goals with regards to estate planning or pre-gifting for their three adult children. 

“[I was] asking probing questions to get a better, more realistic assessment of what their spending needs would be during their active years in retirement, and then their not so active years, because that’s important,” Lam said.  

In terms of Angela’s decumulation strategy, Lam said she used financial planning software to model different drawdown scenarios, such as: “What if she brought down her RRSP early? What does that look in terms of overall taxes? What marginal tax rates can I keep her in since her husband has a defined benefit plan and there are income splitting opportunities there?” 

“It is actually a bit of a fine art to balance,” she explained. 

Ultimately, she recommended early RRSP withdrawals for both Angela and her husband, and applying to unlock the small balance Angela had in a locked-in retirement account.  

She said she intends to revisit the couple’s plans with them prior to Angela’s husband retiring from his position in 2026, and at regular intervals after that. 

For Angela, these conversations have helped her feel confident in the plan because she didn’t think it was feasible for her to retire, she said. This was especially reassuring because she’d heard stories about two friends who recently retired and “really struggled.” 

“One had to seek some therapeutic help, because it was such a shift [from] getting the regular income that they were used to getting,” she said. 

Beware of disconnects 

Some advisors may assume their clients really know and understand their spending needs, but Lam recommended either working with soon-to-retire clients to identify their expenses or encouraging their clients to calculate them because “there might be a disconnect.”  

“It’s a really good exercise,” she said. “I believe that it forms a strong foundation for the plan and more accurately reflects the client’s spending needs. And not only that, but I believe it kind of makes the numbers more meaningful for clients, when they can really connect how their spending dollars can fund their goals and their dreams.” 

At the same time, advisors need to recognize that retirement planning “really goes much deeper than the numbers,” Lam said.  

Many people pour hours of work into their career, and it forms the basis of their identity, so advisors need to help their clients reidentify and rediscover themselves once their career comes to an end or takes a back seat to other parts of life, she recommended.  

“It’s very emotional,” Lam said. “How we can continue to make a contribution, have a sense of story and reidentify ourselves, I think that’s a really important aspect. From there, the vision comes for what activities you’d be doing, where you’d be spending your time, and then that translates to time and numbers.” 

That’s been the most difficult aspect for Angela to wrap her head around, she said, because she spent more than a decade developing her two businesses and mentoring people along the way.  

Her advice for soon-to-be retirees is to find a financial mentor to help with the retirement planning process.  

“It’s been an eye-opener, having somebody professional who is on the journey with you helping you with that documentation, asking all the right questions and … able to present the facts,” she said. 

Reflecting on a book her husband is reading on retirement, which she also picked up recently, Angela shared another message: “Recognize that this is what you’ve … been working all these years for, and now it’s time to enjoy it and figure out how you will spend your time. How will you spend your time when you’re not accountable to anybody but you?” 

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Noushin Ziafati

Noushin has been the associate editor of Advisor.ca since 2024. Previously, she worked at outlets including the CBC, Canadian Press, CTV News, Telegraph-Journal and Chronicle Herald. Reach her at noushin@newcom.ca.