In the corporate world, many employees start counting down the days until they can ride off into retirement. Small business owners, on the other hand, would rather keep working well past retirement age, new research finds.
The latest Wells Fargo/Gallup Small Business Index revealed that if money weren't a consideration, 53 percent of small business owners would choose to keep working in their current ventures, with 17 percent saying they would look to start a new business if money wasn't a concern. Just 27 percent of the small business owners surveyed would immediately retire if they could.
"Many owners don't want to retire at all, but (instead) keep working in their business in some capacity as long as they are able," the study's authors wrote. "These attitudes reinforce a generally upbeat small business environment today."
Overall, small business owners are optimistic about their prospects for retirement. The research found that, if they do decide to stop working, 76 percent of small business owners believe they will have enough money to live comfortably in retirement. That's up considerably from the 66 percent who said the same thing in 2014 and more in line with the feelings of small business owners before the start of the recession in 2007. [See Related Story: Retirement Plan Options for Small Business Owners]
Small business owners are much more confident in how they will fare once they retire than most professionals. In 2016, less than half of the nonretired U.S. adults surveyed said they would have enough money to live comfortably in retirement.
"Small-business owners tend to have a more positive outlook about retirement than U.S. adults overall," the study's authors wrote.
When they do retire, small business owners will rely on their retirement accounts to fund their nonworking years. Specifically, 40 percent say their 401(k), IRA and other retirement accounts will be their main sources of income, while 30 percent said this will be a minor source.
Among other sources, they will rely on include Social Security, the money they get from selling their businesses, the equity they have built up in their homes, and individual stock and mutual fund investments.
Work-sponsored pension plans, money from inheritances and annuities, and insurance plans are the sources they will rely on least.
"These projected sources of income mirror what Gallup has found from the general nonretired population," the study's authors wrote. "However, one exception is work-sponsored pension plans, which 26 percent of all nonretirees, but only 13 percent of small-business owners, cite as a major source of retirement money."
Most small business owners say they aren't very worried about some of the major financial concerns many retirees face, including not being able to pay medical costs or build back retirement savings lost during the recession, not being financially prepared for unexpected life events, not being able to pay for the basic costs of living during retirement, and not being able to sell their businesses when they're ready.
Of those concerns, medical costs was the one they were most worried about.
"But fewer than one in seven small-business owners say they are very worried about the other concerns tested, including the basic issue of not having enough money to pay cost-of-living expenses in retirement," the study's authors wrote.
The study was based on telephone interviews with 602 U.S. small business owners in all 50 states.