A recent article by Marlene Habib in the Globe and Mail provided some new insights into the minds of small business owners who are approaching retirement age. The survey, done by American Express, contacted 555 small-business owners across Canada gave some views on retirement and I’ve added my own comments/questions based on my concerns about this group.
30 per cent expected to fund their retirement at least in part with profits from their ongoing businesses; 27 per cent planned to sell the businesses to fund their retirement.
It’s interesting that only 27 percent plan to sell their business to fund retirement. But if we overlay that number with a statistic from a US source that less than 1 in 4 businesses that go up for sale will actually find a buyer, there will still be a lot of disappointed retirees.
50 per cent wished they could retire tomorrow, but only a third have everything in place to do so.
Wow, half of the entrepreneurs interviewed wished they could retire now! What are they doing about it? Wishes don’t often come true, but plans can.
48 per cent have savings such as RRSPs that could help them finance retirement.
That means 52% are reliant on their business to fund their retirement – either by continuing to work, or by selling it. Looking at it another way, they have all their eggs in one basket. That’s like betting your retirement on one stock. No financial advisor would let you do that.
70 per cent planned to play a role in their businesses after retirement, 30 per cent planned to maintain an ownership interest, 41 per cent planned to work part time.
Ok, I’m beginning to see some real disconnects here. 50 percent wish they could retire now, but 70 percent plan to continue to work in the business after retirement. Sounds like they’re a little confused. It appears they haven’t figured out how to retire, what they are going to retire on, what they’re going to do with their time after they retire and how to make it all work. So the easy response is to do nothing and hope for the best. Hmm. Not very smart and it’s uncharacteristic of those intelligent, driven, results-focused individuals who grew a business from scratch and made it successful. How come they’re so foolish at this juncture?
17 per cent planned to retire before age 60, 40 per cent between 60 and 65, and 34 per cent after 65; 8 per cent don’t expect to retire at all.
Well we know why a lot aren’t planning to retire by age 65. They can’t afford to! Some prefer to work because they love what they do and that’s fantastic. I wonder how many say that because it’s easier than saying I don’t plan to retire because I can’t afford it.
There is a better way and it’s painless. Begin today to plan the future and what you need to do to make it happen. We’ll be discussing some intelligent options at a seminar on March 29th. Check it out here: BTC Breakfast Flyer – March 29, 11