When Should Your Partners Retire?

Source: Solutions for CPA Firm Leaders

The following includes excerpts, reproduced with permission, from a blog post by Rita Keller.

If your CPA firm, like so many others across the country, is facing the succession challenge, try this simple Retirement Timeline Exercise and use it as a tool at your next management retreat.

Do you have too many clusters of partners reaching retirement age? How many younger partners are also in clusters?

I suggest doing two timelines – one based on the year a partner reaches age 65 (in many firms this is when you have to sell your stock) and one based on when the individual partner thinks he/she will actually “retire.”

One of the major issues you will be facing is that many partners will reach retirement age, sell their stock and then want to stay active in the firm for many years to come. You have to decide if that's a good thing or a bad thing. It's often a downer for the young partners and future partners in the firm in that they are looking forward to their chance to take over and do things their way.

In years gone by, firms have been able to keep the founder on the payroll and provide an office and other support. However, now you might be facing many Baby Boomer partners wanting to keep working. Does it make sense to have four or five over-65, former partners around the office indefinitely? Be sure to examine, discuss and decide what is really best for the firm.

For the complete blog entry, read “CPA Firm Partner Retirement Timeline.”

From Solutions for CPA Firm Leaders, the blog of Rita Keller, president of Keller Advisors, LLC, [email protected], January 31, 2012. Visit http://ritakeller.com/blog/.