SAN FRANCISCO - August 31, 2010
Business owners are changing the way they approach their retirement in light of economic conditions. The latest Wells Fargo/Gallup Small Business Index, surveyed in July 2010, shows many business owners are looking at a later retirement with 69 percent of business owners not planning to retire or cut back on work until age 65 or older. This is a 17 percentage point increase in this category from December ’07 and a 28 percentage point increase from September ‘05. Respondents saying they plan to retire earlier than full retirement age (between ages 60 and 64) decreased to 21 percent from 27 percent. Those anticipating retiring before age 60 decreased to 11 percent from 21 percent in December ’07.
Sixty-two percent of business owners surveyed indicated that they made changes to their retirement strategy as a result of the economic downturn. With continued pressure from the current economic environment, 68 percent of business owners say they are worried about not being able to build back retirement savings lost during the recent economic downturn. Since Q4 2007, fewer respondents (63 percent vs. 79 percent in 2007) were confident that they will have enough money to live comfortably when they do retire.
“Many business owners are reinventing their business approaches in order to ensure financial stability for the long-run,” said Doug Case, Wells Fargo small business segment manager. “This often has a direct impact on personal retirement plans and tests the resilience and entrepreneurial flexibility which characterize small business ownership.”
When asked what they would miss most about working, 78 percent say they would miss seeing their business grow and thrive, 74 percent would miss interacting with customers and 67 percent said they would miss working in a challenging environment. Forty-seven percent of respondents reported they never plan to retire unless forced to do so for health reasons, an increase from 40 percent reported in December 2007. The majority of survey respondents, however, look at retirement as a time to work at something they enjoy doing, on their own terms.
In addition to being America’s number one small business lender, Wells Fargo is also a leader in retirement services. Karen Wimbish, head of Wells Fargo Retail Retirement, connects the small business owner experience to retirement planning for the greater consumer population.
“These results tie closely to what we are seeing from an overall retirement planning picture with most consumers expressing that they are delaying their expected retirement an average of three additional years,” said Wimbish. “Small businesses account for most new hires and for 99.7 percent of all U.S. employers. As they make changes in order to keep their doors open, this creates changes for their employees’ financial security and retirement options as well. The success of small business is vital to the overall economic and retirement picture.”
For more than 70 years, Gallup has been a recognized leader in the measurement and analysis of people’s attitudes, opinions and behavior. While best known for the Gallup Poll, founded in 1935, Gallup’s current activities consist largely of providing marketing and management research, advisory services and education to the world’s largest corporations and institutions.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a nationwide, diversified, community-based financial services company with $1.2 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 10,000 banking stores, 12,000 ATMs, the Internet (wellsfargo.com and wachovia.com), and other distribution channels across North America and internationally. With more than 278,000 team members, Wells Fargo serves one in three households in America. Wells Fargo & Company was ranked #19 on Fortune’s 2009 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy all our customers’ financial needs and help them succeed financially.
Wells Fargo is America’s #1 small business lender (2008 Community Reinvestment Act government data) and a leading lender to women- and diverse-owned businesses. Through its award-winning online advice library of business resources, including topical videos and webcasts, Wells Fargo provides business owners with timely advice and information to help them succeed financially. For more information, speak with a Wells Fargo banker, visit wellsfargo.com/biz or call the National Business Banking Center at 1-800-CALL-WELLS.
Note: Survey results available upon request.