Small business owners stay involved in business after retirement, report
By Mario Cywinski | September 30, 2010
Nearly a third of Canadian small business owners (SBOs) have everything in place to retire tomorrow, with half of owners wishing to do so, according to American Express Canada Small Business Monitor.
However, being a small business owner means when you retire you maintain a role in the business according to 70 per cent of SBOs. Nearly 30 per cent plan to keep an ownership interest through retirement, while 41 plan to work part-time in some capacity for the business.
"We know that SBOs see work differently than others," said Eric Nielsen, vice-president and GM, Small Business Services Canada, American Express Canada. "Owning a small business isn't just about the money, it's a lifestyle choice, and being a small business owner is part of how many define themselves and their lives."
Just over a third (34 per cent) of SBOs plan to retire after age 65, with eight per cent not planning on retiring at all, 40 per cent between 60 and 65 and a mere 17 per cent plan to retire before 60. The view of when they plan to retire changes as SBOs get older, 67 per cent of 18 to 34 year olds want to retire before 60; 54 per cent of 65 and over owners say they will work till at least 65.
Even for those who wish to retire early, 48 per cent of all respondents said they have no savings for retirement (including RRSP). The reason for this is that 30 per cent of SBOs plan to fund their retirement with profits from the ongoing business, while 27 per cent will sell the business to fund retirement.
"In many cases, SBOs businesses are their retirement plans, so it's not surprising that some will have to delay their retirement because of the downturn [in the economy]," said Nielsen. "What's encouraging is that more than half (54%) expect that they will still retire in a better financial position than their friends who don't own businesses."
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