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Retirement Planning > Retirement Investing

Boomer Business Owners Less Confident in Their Retirement Plans

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A vast majority of business owners in a new survey express confidence in their plans to ensure financial security in retirement. But those closer to that landmark date are less confident, the survey findings show.

TD Wealth’s business owner retirement readiness survey found that 78% of millennial business owners and 69% of Gen Xers were very confident that their long-term investment plans would help them achieve their goals.

In contrast, only 59% of baby boomers said the same.

“High-net-worth business owners face a myriad of challenges when it comes to their financial security in retirement,” Kenneth Thompson, TD Wealth’s head of trust and investments, said in a statement.

“A financial plan is not only crucial to having confidence in retirement, but also to confidence in a business owner’s exit strategy, succession and estate planning, and other priorities that are vital to achieving financial goals.”

For business owners who do achieve their financial goals and can retire in luxury, a number of attractive residential options around the country beckon.

Seven out of 10 business owners in the survey reported that they worked with a financial advisor, including 77% of millennials and 64% of boomers. TD Wealth said business owners who worked with an advisor were significantly likelier to be confident in their future income compared with those who do not.

“While everyone can benefit from working with a financial planner regardless of age or net worth, business ownership adds an entirely new dynamic and complexity to retirement planning that necessitates a very particular expertise,” Thompson said.

“Working with a professional advisor to establish a bespoke plan can help business owners prepare and feel confident as they head into retirement.”

Maru/Matchbox conducted the survey between Jan. 24 and Feb. 4 among 1,002 business owners with investable assets of more than $500,000.

The survey also explored other influences besides confidence in their retirement plan and involvement with a financial advisor that determine business owners’ retirement readiness.

Two-thirds of survey respondents said they expected to retire between the ages of 51 and 75. Twelve percent of those 55 and older said they planned never to retire, vs. 3% of business owners 18 to 34.

Business owners who said they planned to retire at age 50 or earlier skewed younger. Fifteen percent of these were millennials, and 7% were Gen Xers.

Many business owners expressed concerns around how external factors may affect their ability to achieve their financial goals, with 50% citing economic uncertainty and 40% market volatility. Concerns about health insurance costs increased with age, rising from 25% among millennials to 34% among boomers.

The survey also found that for retirement income, a healthy mix is important. A third of high-net-worth business owners in the survey estimated that their retirement income would come from these sources: retirement savings plan, 34%; investment portfolio, 21%; Social Security, 11%; and personal savings, 10%; with the balance coming from other sources.

— Check out The 6 L’s of Small-Business Planning on ThinkAdvisor.


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