Small business owners in New Jersey and other parts of the nation may be in for a rude awakening as they near retirement age. Because they have spent so much time and money focusing on growing their business, they often neglect an important element: saving for retirement. Since owners of small companies often have no company-sponsored 401(k), IRA or other retirement plan, they must find a way to save money or invest on their own.
The statistics are a sobering reminder of how difficult it is for people to worry about the future when current economic trends make saving money a daily struggle. Business owners--as many as 80 percent--have already turned to personal bank accounts, stocks, IRAs and other sources of money to keep their business afloat during the recent recession. According to a survey by American Express, 60 percent of small business owners will not be able to save the money they need to retire. More than 70 percent fear they will be unable to afford the lifestyle they want.
It appears that younger business owners are even less likely to save for retirement. Of those under age 35, only 17 percent have started saving for retirement. That percentage doubles to 34 percent for those ages 35 to 49. Of those ages 50 and older, only 41 percent have retirement savings.
There are many savings plans available for business owners, including 401(k)s and IRAs. Business owners may also want to see if a Small Business Development Center is available in their area. These offices provide financial help to entrepreneurs.
Source: Daily Herald, " Small business owners neglect retirement savings," July 14, 2013