Retirement readiness plans are not the chief concern for most business owners. The majority of companies are staying the course when it comes to their retirement readiness plans. This is surprising, despite the Covid-19 pandemic and the economic turmoil it has wrought during 2020.
This is according to the second annual TD Wealth Retirement Readiness Study. A majority of business owners (85%) said they are not planning to make changes to their retirement planning, according to the study. Nonetheless, TD also found that 87% of business owners reported that Covid-19 affected their revenues. The study found nearly half (49%) had to reduce their operations. Although a quarter experienced temporary or permanent closures.
Economic and political uncertainty were indicated as chief reasons business owners were concerned about achieving their financial goals. Sixty-nine percent said they had these worries. Stay-at-home mandates and non-essential businesses closures also have business owners worried. But retirement readiness seems to be an area of confidence for business owners, especially in the high net worth category.
Business owners indicated in the TD study that a financial advisor could help raise their confidence and improve their retirement readiness. Sixty-one percent said they would work with a financial advisor. Millennials were more likely to work with a financial advisor (68%) compared to baby boomers (58%). Working with a financial advisor can help to assuage fears about uncertainty and retirement readiness plans. A financial advisor can help business owners navigate market volatility and economic concerns, according to TD.
Business owners with a long-term investment plan appeared confident about their retirement readiness plans. Ninety-four percent are (somewhat or very) confident that they will achieve their financial goals due to their long-term investment plan. What’s more, high net worth business owners are fairly confident about their retirement readiness. Over 93% are (very or somewhat) confident that their financial plans will enable them to generate the income they need in retirement. That’s a slight dip from 2019, when 95% of high net worth business owners indicated they were confident in their financial plans’ ability to help them achieve retirement readiness.
According to TD, when it comes to retirement readiness plans, specifically, “…retirement income, a healthy mix is important. For business owners, retirement savings plans constitute the highest proportion of retirement income, followed by investment portfolio and social security. Retirement savings and investment portfolios make up more than half of the retirement income across all respondents.”