This discussion will concern itself primarily with the retirement of the proprietor. Retiring from public service and industry has its own peculiar considerations. For instance, where publicly administered retirement programs exist there is a certain amount of predictability and stability. There may also be mandatory retirement ages and offers of buyout for early retirement. An early retirement package offered to a professional in the industry sometimes results in valuable consultative opportunities with the same company the professional has just retired from. I have friends in that enviable position who will admit that their good fortune had more to do with economic conditions and company growth philosophy than with their own good planning.
For the proprietor, however, providing for retirement calls for planning early and often through the life of one’s business experience. I suggest there is no time too early to start. Writing in the March 1998 POB, I discussed start-up considerations for the new survey practice and raised the “participation issue.” What were the new proprietor’s intentions regarding partners or associates? Would employees or associates be offered long-term participation options such as future partnerships, profit-sharing plans or some kind of future ownership share? The course a business will follow and the impact on a proprietor’s retirement planning can be determined to a large extent by the answers to those questions. The presence of partners and associates standing by to continue a business may be an elderly surveyor/proprietor’s best access to a comfortable retirement.
But beware of the unfunded retirement plan. I have seen more than one proprietor approach his later years counting on his partners to continue his salary into and through retirement without having funded the means to do so. The retiree in such a situation is totally at the mercy of his associates, their business acumen and the economic conditions through his remaining years. The unfunded retirement of a principal can present not only a rude surprise for the retiree but a burden too great for the business to carry. The answer, of course, is a carefully structured buyout plan begun early enough to provide the means for a smooth ownership transition.
Some proprietors follow a much different path in the development of their businesses. A professional surveyor may determine at the very beginning of his or her business that there will be no partners, no associates—just the proprietor as sole owner and sole professional with a minimum of employees. (The sole proprietor may hire other professionals but they may not stay long when they discover no opportunity for a share of ownership benefits.) Such a professional can do very well in the right market. The sole proprietor controls all the work, maintains all the client contacts, conducts the marketing efforts and limits professional liability to his or her own professional operations and decisions—and pockets all the rewards.
In this model the proprietor had better invest those rewards well with an eye on the retirement years. (Good idea to learn the language and strategy of tax sheltered programs like IRAs, 401(k)s and SERPs.) While there may be opportunity to sell a surveying business, the assets will be limited to the business files, a client list, some outdated equipment and a very limited asset called good will. The name over the door will disappear when the proprietor retires and sells his or her assets to the next occupant. And unless the retiring professional is willing to allow a continued use of his or her name—with the attendant liability—the new proprietor must build his or her own name and good will. In the sale of such a business the question always arises, What is to be done about work in progress and accounts receivable? My best advice is for the retiring proprietor to wrap up all projects and collect all receivables in order to avoid liability problems, misunderstandings and disappointments regarding the worth of the work and accounts. It doesn’t take an MBA to do the math and figure the inventory worth of a retiring surveyor’s business when it is reduced to files, furniture and equipment. What is surprising is the number of retiring proprietors I have come across over the years who were dismayed to learn the true worth of a survey practice built up over 40 or 50 years.
What To Do in RetirementMany retiring surveyors are happy to walk away from the business and all its headaches. A changing technology, bewildering in the speed of its advance and the demands on a business’ capital, is more than some elderly citizens want to deal with. To some there is no prettier sight than the golf courses of the Gulf Coast of Florida. To others retirement heaven is an RV and the open road. But a few choose to stay where they have been all those years, near the grandkids, the circle of friends of a lifetime, and the community and church-centered activities that have occupied them. There may be opportunities for an occasional consulting job; a half century of professional experience has to be worth something. The trick is to find the opportunities and that, too, is where retirement planning comes in. The final five or 10 years of a surveyor’s active career is a good time to forge relationships with an eye to future opportunities. There are lawyers, entrepreneurs, the local town engineer and many others who may need the objective advice of a well-experienced surveyor with a keen knowledge of the local conditions. The retired surveyor may be surprised one day to discover a former competitor calling for the consultative advice of a grayer head. Never underestimate the image of success and respectability attached to the retired professional.
The retired professional looking for consulting opportunities will find most of her or his success through networking, and one of the best networking mediums is the professional association. Membership in NSPS, ACSM and the state surveyor associations are often touted for their value in making contacts. That value was proven to me when I found myself with all the work I wanted to handle in my first years of “retirement.” Two opportunities for professional activity came to me through contacts I had made in NSPS/ACSM, and both of those from people 500 miles or more from my home in New England.
The most surprising thing to me in retirement has been the wealth of opportunities for consulting work and the wide variety of sources for that work, which brings up my final point on the subject of retirement from a career in surveying: do what’s best for you, but do something.
Surveying is a challenging business that requires mental and physical vigor. Some may be satisfied to retire to the rocking chair and the daily soaps. Most, I believe, will find such a routine suffocating and will need something to engage the juices that have driven them all those years. Many will be happy with golf or fishing. Others will travel. And some will make a joyful mix of golf and travel while keeping their hand in the surveying game, bringing a lifetime of wisdom to whomever needs it. More than one retiree has told me his days are as full now as they were before he retired.
There are opportunities for pro bono work, but if an occasional consulting assignment will bring in a few dollars to augment the retirement income, so much the better. By the way, if you really enjoy doing it you won’t mind paying back some of your social security earnings when you find you have earned over the limit. All of this is true, of course, assuming you planned early and carefully for retirement.