Small business owners are just as unprepared for retirement as the rest of us, it turns out. Maybe more so.

According to a new report from BMO Wealth Management, only a fraction of the nation’s 28 million small business owners are prepared for retirement. BMO called the report “startling.”

According to the survey:

  • 75 percent of small business owners have saved less than $100,000 in retirement funds. In the upper age bracket (ages 45-64) the entrepreneurs were only slightly more prepared — 68 percent have saved less than $100,000.
  • Only 8 percent had saved more than $500,000, which is still not considered enough for retirement for many people.

Jason Miller, national head of wealth planning at BMO Wealth Management, says they weren’t surprised by the results.

“Unfortunately, the results bear out what we see in practice,” he says. “I don’t know that there were any surprises.”

And why don’t small business owners save?

“We have tremendous respect for small business owners,” he says. “They drive our economic activity. But starting and running a small business ins challenging, especially through economic cycles. They become very focused on running their business, and lots of times that requires any profit made in the business to be re-invested to make it grow.  Unfortunately, sometimes personal retirement planning is not done along side of that.”

His tips to help small business owners better plan for retirement:

“To the extent possible, be mindful of the idea that along with building a successful business, they should have a focus on accumulating  wealth outside of the business. And for those nearing an exit, they should be putting together a thoughtful succession and considering the post-sale effect. They should consider the  personal implications for the remainder of their retirement .

“Preparation and pre-planing is key,” he says. “It’s easy for momentum to take over. Slow down, step aside and put together a plan for contingency and business succession.”

Other news: 

Question of the week: Do you dream of turning a hobby or a dream into a business after you retire?  Send comments to Please include your name, city and state. In the subject line put “Retirement hobby.”

Last week’s question: What’s the best advice you would give to someone about to retire?

Carolyn McPherson of Charlottesville, Va.:

Before you retire, plan what you are going to do to get your gold watch. The statistics regarding retirees are alarming Last I read, retirees die within two years. So, get another job. It can be part-time and something completely different, but it should be something that has structure and requires a commitment. My husband retired from a high-level IT job and is building ham radio emergency networks and also mentoring our grandaughters’ elementary school. He is wonderfully busy and happy.

Charles “Chip” Cole of Kernersville, N.C.:

Delay Social Security as long as possible. Understand that inflation for the elderly is not same as CPI inflation; may be higher due to cost of drugs, housing etc. Most middle- to upper-middle-class retirees will spend like they didn’t retire, not at 70-80 percent of income.

Steve Parsons:

Think of day one of your retirement as your first day on a new job. Sure, things will be different. Just remember all the things you will no longer have to do: endure a performance review; ask for time off; bring food on food day; endure a pointless meeting; or listen to a co-worker drone on and on about their cat or kid.

Now, think of the things you can do: say no; say yes; say maybe; and learn to live a new and exciting way.

Likely the best thing to do is just keep busy, make plans, always have something to look forward to, such as a trip, project, visit or activity. Life’s about living. Get busy.

(retiring in 3,658 days)

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