why you’ll get less from your partners in a buyout than you might by selling the whole firm

how to determine partner retirement payout terms and annual limits.

by marc rosenberg

the vast majority of firms pay retirement benefits over a 10-year period, according to our research.

more on retirement: three ways to calculate goodwill payable in partner buyouts, none of them great | eat what you kill? then maybe ‘book of business’ is for you | the multiple of compensation method, fully explained | the ins and outs of aav for goodwill | 5 points to consider when paying out goodwill | clients leaving? time to reduce retirement benefits | how to set terms and limits for goodwill payouts | 4 ways to decide how to pay out capital | partners may balk at guaranteeing retirement obligations

we occasionally see five to seven years at lower payout levels. and some firms under $10 million adopt five-year payouts for goodwill, reasoning that because five-year payouts are common for the purchase of a cpa firm, the same term should apply to their own buyouts.

but external purchases of firms are quite different than internal buyouts.