Post retirement employment. As the retirement date approaches, the retiring partner should have less and less to do as other partners and staff in the firm assume the client responsibilities. When the retirement date arrives, the retiring partner should be able to truly retire from the firm and leave. But that rarely happens. Most firms and most retired partners will continue some form of employment, post retirement. Here is the key: the continued employment should be for specific defined duties such as review work, bringing in new clients, special projects, etc., it is generally on a part time schedule and it is at the option of the firm. It is not continuing to do what you were doing - serving clients in a partner capacity!
The retirement of our partners in a fashion that protects the firm is a critical part of succession planning. If your partner agreements do not provide guidance and requirements surrounding the age of retirement, pull them out of the drawer, dust them off and make the revisions to address this major issue. Again, protect the firm.
Gary Adamson is the President of Adamson Advisory, specializing in practice management consulting for CPA firms. He is an Indiana University graduate and has extensive hands on experience as the recent managing partner of a top 200 CPA firm. For more about Adamson Advisory, visit www.adamsonadvisory.com.