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How Prepared are Small Business Owners for Retirement?

December 05, 2014

A few years back the Guardian Life Insurance Company conducted a survey on small business owners (SBOs) and how they and their businesses are faring this year compared to other years. The survey, which was given to 1,400 SBOs, was conducted online and took approximately 20-minutes per person. To participate in the study, SBOs were required to be between the ages of 25 and 74, hold the title of owner or part-owner of a business, claim business revenues of $500K or more, have 2-99 employees, and have a minimum household income of $75K.

Three main questions were used to guide the survey:

  1. What is driving small business owners' behaviors and attitudes towards retirement?
  2. What is their overall retirement preparedness?
  3. Are there evident gender differences in small business owners' attitudes towards retirement readiness?"

According to the study, SBOs "overwhelmingly enjoy being their own boss." Nearly four in 10 SBOs "would never work for someone else" after retiring, and one of the driving forces behind retirement seems to be the value of living life on one's own schedule. Nearly two-fifths of SBOs believe that running their own business gives them more time to spend with their family, another value associated with retirement. In addition, more small business owners reported that their spouses and partners were either in the process of planning for their own retirement or had already retired. This seems to be a cause for SBOs to begin planning their own retirement as well.

Having control over their wealth and their business is also crucial to small business owners, most of whom started their businesses themselves and have been in business for 15 years. Of the SBOs polled, the majority said that having their own company "is the best way to create the wealth they desire."

The majority of SBOs polled feel positive about being retirement ready, and an increasing number report they feel they can afford to retire. Small business owners who have retirement plans and succession plans in place are generally more confident than those who don't. This extra dose of confidence is exhibited in a variety of positive aspects:


  • They seem to have more of a sense of urgency about planning the future of their business and their life
  • They are financially more successful than those who do not have plans
  • They are more likely to have higher revenues
  • They are more likely to have a larger business
  • They feel they are able to retire earlier than expected
  • They expect their business to grow, and feel more financially secure

Just over half (52%) of SBOs polled report they are "Very/Fairly Well" prepared for retirement, although the study shows that they might still need and want more information, particularly with financial planning and investment advice. According to the study, "when asked what they need to help them prepare for retirement, the most common response was 'financial planning/investment advice,' including information on next steps to take, what their options are, understanding how much they'll need for retirement, help in establishing a plan, understanding tax implications, and acquiring advice on growing their savings."

In terms of gender differences, female small business owners are more likely to acknowledge that they are not as confident and financially prepared for retirement as their male counterparts. 56% of the men polled said they feel financially prepared for retirement, while only 45% of women felt the same. In addition, 28% of the men polled were looking for financial risk, compared with only 21% of the women. However, when it comes to financial planning suggestions, women are more receptive and open to advice than are men.

While men and women exhibit different percentages in the context of retirement preparedness, the study found that they both value the same five values when looking for a good financial advisor.

Couple standing in front of organic food store smiling

These characteristics are:

  • Has integrity
  • Listens to me and my needs
  • Experienced
  • Knowledgeable
  • Trustworthy


Overall, small business owners seem to be on the right track. Most have a plan of some kind set up for retirement, and the majority of them have clear priorities and goals for their personal lives and for the lives of their businesses.












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