Can I live off the money from selling my business?

Find the annual spending gap

Build a household budget in today's pounds. Split essential costs, flexible lifestyle spending and large one-off commitments. Then subtract reliable after-tax income expected in that period. The remaining gap is what your accessible assets need to support.

An owner expecting £90,000 of yearly spending and £20,000 of reliable net income has a £70,000 annual gap. Against £2 million of available assets, that is an initial 3.5% cash requirement. This calculation describes the starting position only; it does not establish a sustainable withdrawal rate, include every cost or promise that the money will last.

Map different periods of your life

Your income sources may change when consultancy ends, a pension becomes accessible or the State Pension begins. Your spending may change when children become independent, a mortgage is repaid or care is needed. Build a timeline rather than one lifelong average.

List assets by access and purpose. Money reserved for tax, a planned property purchase or business obligations is not part of the same spending pot as unrestricted investment capital. An earn-out remains a separate scenario until its amount and timing are established. Avoid counting the family home as available retirement cash unless the plan explains how money would be released.

Test what could change the answer

Inflation means that the same lifestyle can cost more over time. Investment returns vary, fees and tax reduce what is available, and withdrawals during market falls can leave less capital to recover. MoneyHelper's retirement guidance highlights the interaction between withdrawals, investment risk and how long money needs to last.

Ask a planner to show what happens with higher spending, weaker returns early in retirement, longer life and delayed future payments. Ask which assumptions drive the result. A projection is a model, not a guarantee; the most useful output is often identifying decisions you can adjust if circumstances change.

Reference: MoneyHelper: How to invest pensions in retirement

Make the plan reviewable

Agree how household cash will be funded and when the plan will be reviewed. Decide which spending could fall temporarily and which costs need greater certainty. Include any intention to preserve capital for family rather than assuming that every pound is available to spend during your lifetime.

You may choose to keep some work for income, interest or routine. Model that as an explicit option. This guide cannot determine a suitable withdrawal strategy or pension-access decision for you; tax wrappers, age, health and family circumstances require individual assessment.

• List annual essentials, flexible spending and one-off plans.
• Subtract dependable after-tax income for each period.
• Exclude tax reserves and restricted or conditional proceeds.
• Stress-test inflation, early losses, longevity and payment delays.
• Agree review dates and adjustments if the plan falls behind.

Reference: MoneyHelper: Retirement budget planner