Most of America's small-business owners are as concerned about their retirement as they are unprepared for it, and apparently too busy to put a plan down on paper.
Those are among the findings of a study based on 1,255 interviews of American small-business owners (835 women and 420 men) released last week by The American College.
Increases in the cost of living and health care are a big worry, the study found, and 37% of women and 38% of men said they think their retirement planning needs are complex. Accordingly, most interviewees (66% of women and 70% of men) said they have developed an estimate of their retirement needs, but the extent of their planning could leave them vulnerable.
Only about half have sought the help of a financial professional, a quarter have used online calculators, and the remainder have arrived at an estimate using pencil and paper to perform simple calculations themselves.
Most do not have a formal plan to achieve their financial objectives. Among the small-business owners surveyed, 77% of women and 74% of men have no written retirement blueprint. This suggests a potentially dangerous tendency to oversimplify an increasingly complicated financial planning situation that needs to account for hard-to-calculate figures such as rising costs, longevity, the cost of long-term care and a changing tax environment, the study found.
“Business owners have no one to rely on in terms of retirement,” said Mary Quist-Newins, director of the State Farm Center for Women and Financial Services at The American College, adding that the mean age of those interviewed is 50. “This is sort of a looming disaster.”
