A new report has highlighted that small business owners are not saving enough for retirement. Experts believe that they are so focused on growing their business that they are not saving or saving less money than they will actually need. Some tips to help the small business owners save more were also shared so that the situation can be rectified.
Report on Small Business Owners not Saving Enough for Retirement
The report that says that the small business owners are not saving enough for retirement was shared by a reputed wealth management services provider, BOMWealthManagement. It states that just a fraction of 28 million small business owners is prepared for retirement. The company also called the report to be startling.
The survey finds that about 75 percent of the small business owners have saved even less than $100,000 towards the retirement funds. About 68 percent of the people between the ages of 45 and 64 have saved less than $100,000 towards retirement.
The survey also revealed that just 8 percent of the respondents have saved over $500,000 and this number is also not enough for some people, especially the ones who are looking for a comfortable post-retirement life.
Jason Miller who serves at BMO Wealth Management as the National Head of Wealth Planning says that the main reason why the small business owners fail to save is that they are too focused on running their business. They often invest a chunk of their profits back in the business to grow it further which leaves no room for setting money aside for retirement planning.
Miller has shared a few tips to help small business owners in saving for retirement. His first tip is to remember that along with generating wealth through the business, they need to accumulate wealth outside the business too. He adds that people who are nearing an exit must ensure good succession and consider the post-sale effect too. The personal implications for the remainder of the retirement must be considered too.
Miller also shared that preparation and pre-planning are the keys for all the small business owners who want success in saving for retirement. They must not let the momentum take over. They must also focus on slowing down, stepping aside at times and defining a plan for business succession and contingency.