Dear Advisor: I am a healthy, 65 year-old president and CEO of a successful business. I have a son and daughter who have been involved in the management of our business for the past five years, and I am confident they are ready to take over the day-to-day leadership of the business. The challenge is with me; I am not entirely sure I am ready for retirement! I have a lot of energy, and while I sit on a few outside boards and am involved in our community—I would like to explore a semi-retirement option at our business, to be able to stay involved where I can be of help. However, I don’t want to “get in the way.” Do you have some advice on how to structure a semi-retirement in a family business?

Semi-retirement can certainly make for a challenging transition—but it doesn’t always have to. You can take a number of steps to make this arrangement work, but before you work out the “how” to do this right—you have to first determine the “why” this would represent a good formula for all concerned.

First, check your own reasoning and expectations. Why do you feel you are not ready for retirement? Have you not developed sufficient outside interests? We often work with clients whose sense of identity is so tied to their business that they literally don’t know “who” else they are—they have no ability to take on a role other than “leader of the business.” Another issue many hesitant retirees fear is the state of their marriage. They have spent years working on the business instead of their marriage and fear that retirement will expose strains in the marriage that the leader would rather avoid. In any situation where the primary motivation for the plan of semi-retirement is avoidance, we would generally advise against the semi-retirement option.

Second, consider all the stakeholders and how they are likely to respond to this arrangement. If there are key executives in the business who “grew up” with you in the leadership role, and have always expressed a strong personal loyalty to you—your continuing presence at the business may lead to confusion around leadership, and make it harder for your successors to assume their place. Likewise, if the successors have a tendency to be deferential to you and run to you for key decisions, it may be best to make yourself more scarce to push them to make the hard decisions on their own—even if that means they sometimes make a mistake. 

If your motivations are not driven by avoidance and the key stakeholders are able to accept you in a different role and the successor in the leadership position—then the question is how do you ensure you are making as positive a contribution as possible? The keys are to be clear, consistent, constructive, and conscientious. 

  1. Clarify your new role and consistently stick to it. Ensure all stakeholders understand your new role, and carefully ensure you do not step over the boundaries of this role. When someone comes to you with a question that should be addressed by the current leadership, you must resist the temptation to provide input and gently direct the questioner to the proper authority. 
  2. Inquire of your successors HOW they would like to use you as a resource. After all, if your role is to be the seasoned elder providing wisdom, you must determine on what subjects the current leadership is looking for your input and ideas. You must embrace the role of advisor—not that of policy setter. 
  3. Provide your input where it has been requested, but accept when your idea is not accepted, do not lobby for your position or point of view—this can be very destructive to the credibility of your successor.
  4. Do not criticize employees, nor the “way things are done” today. You may offer insight and thoughts on an alternative suggestion for how to address a given challenge, but always seek to be constructive in your comments – and always be mindful of your audience. If you disagree with your successor on something, and you feel they should benefit from your input, bring it up with him or her behind closed doors.
  5. Finally, make sure you invest sufficient time in your retirement—while a successful semi-retirement can be fun and rewarding, don’t let it get in the way of your developing some leisure interests and pursuits!​