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Diversions May 28, 2015
Retirement Plans Look Murky for Many Small Businesses
Small-business owners brim with
confidence in most areas of running their business—handling finances, knowing
when to hire and managing employees—until it comes to their own retirement.
Reported by Jill Cornfield
More than one-quarter (26%) of small-business owners are not confident they will save enough to retire comfortably, according to a survey by TD Bank. The most jittery are Baby Boomers, with 28% saying they are not very or not at all confident that they have enough savings, compared with 21% of Millennials.
A possible key factor in this lack of confidence: Boomers started their current business at an average age of 43; Millennials began theirs at 26, on average, giving younger adults more time to expand the business and invest in retirement funds.
Most business owners (73%) do not have a financial adviser or dedicated banker for financial planning and small-business needs. Most go to family and friends for advice (45%), followed by the Internet (36%).
Among other findings:
- 47% of business owners said they do not yet have a retirement plan in place, while approximately one in four indicated that they would close the business.
- 27% who started the company from scratch said they plan to close their business when they retire, compared with only 8% of those who took over an existing business.
- 15% said they would transfer ownership of the business to family or co-workers.