TD Wealth study: Business owners are more confident in their ability to retire

The findings of TD Wealth’s annual Retirement Readiness Study revealed that the confidence of “Mass Affluent” business owners saw a 13-point increase (95% versus 82% in 2020) when asked about their confidence in their financial plans’ ability to generate income needed during retirement.

Additionally, most “High Net Worth” business owners (97%) also expressed confidence that their financial plans will be able to generate the income needed during retirement (versus 94% in 2020 and 95% in 2019).

TD Wealth commissioned Maru/Matchbox to conduct a survey targeting business owners with investable assets over $100,000 with the objective of finding out about their retirement plans and the future of their business. A total of 747 responses were collected from a questionnaire fielded in August 2021.

But, amid a pandemic, there are still concerns. Economic uncertainty and market volatility continue to remain top concerns when it comes to business owners achieving their financial goals this year. However, emerging as additional top concerns for business owners in 2021 were inflation and rising interest rates, especially as the country continues to grapple with the economic recovery in the wake of the COVID-19 pandemic.

“While business owners today are concerned about the external pressures that may be potential threats to their retirement confidence, they also continue to understand that a successful path to retirement means staying the course and weathering short-term volatility for potential longer-term success,” said Ken Thompson, head of U.S. Wealth Shared Services, TD Bank.

Six-in-ten business owners (59%) reported that they work with a financial adviser, and many found that this leads to greater confidence in their financial success in the long term. According to the survey, confidence is higher among business owners with a financial adviser (55%, compared with 43% of those without a financial adviser).

Business owners were not immune to the growing trend of individuals choosing to leave their place of employment for new opportunities, as 42% of High-Net-Worth business owners reported that they lost employees because of the pandemic, compared with Mass Affluent business owners at 37%. Thirty-six percent of business owners reported difficulties in hiring new employees in 2021, citing COVID-19 health concerns (64%), salary/wage offering (35%) and the location of their business (33%) as reasons that they have had difficulties.

“Despite the challenges that business owners continue to face in the wake of the pandemic, many found financial partners paramount,” Thompson said. “A financial institution and adviser not only can help business owners with establishing financial goals and a long-term investment plan, but they can also act as an objective sounding board to help business owners navigate the many stages of their financial and business lifecycles.”