New Nationwide Survey Reveals Millennial Business Owners Focus on Retirement More Than Gen X or Baby Boomers
Sunday, November 11th, 2018
Despite numerous stereotypes about Millennials, a new survey by Nationwide reveals they could be more prepared and supportive of planning for the future than Gen X or Baby Boomer business owners.
According to the study, Millennial business owners are nearly twice as likely as the average owner to offer retirement benefits to their employees in the future (69 percent versus 36 percent).
They also recognize the importance of a workplace saving plan for their own retirement savings with 53 percent of Millennials stating so compared to only 39 percent for Boomers. Additionally, Millennials are more likely to feel it is their responsibility to help their employees save for retirement (57 percent) versus less than a third (31 percent) of Boomers and 44 percent of Gen X business owners.
"Our research shows that Millennial business owners understand both the importance of saving for retirement and the need for workplace retirement benefits," said John Carter, president of retirement plans for Nationwide. "Millennials grew up during the Great Recession a decade ago, which significantly impacted how the generation spends, saves and manages their money and businesses. Now, they are planning ahead and taking actions that could help them and their employees achieve financial security in retirement."
Economic Growth Helps
Most business owners (61 percent) report they are expecting better sales this year, including 64 percent of Millennial business owners. With unemployment extremely low, 51 percent of Millennial business owners agree that offering a retirement plan helps them attract and retain the best talent, compared to 44 and 31 percent for Gen X and Boomers, respectively.
Even though roughly half (49 percent) of all business owners will not take any action with their retirement benefits due to tax reform, attitudes on the impact of tax reform as well as planned actions vary across generations.
Nearly a third (32 percent) of Millennial business owners will increase retirement contributions due to tax reform, compared to just 18 percent for all business owners. Also, a quarter (25 percent) of Millennial business owners who plan to offer retirement benefits say tax reform has made it possible for them to do so versus 19 percent of all business owners.
"With the continued economic expansion tightening labor markets, it's more important than ever for employers to offer comprehensive benefits like retirement plans," said John Carter, president of retirement plans at Nationwide. "Some of the most successful companies that we've worked with take an active role in encouraging their associates to plan for their future."
Millennials Plan and Seek Advice
Millennials focus on retirement doesn't stop at a company plan. They are also more likely to have an exit plan for their business. Twenty-three percent have identified a third-party to sell their business to in advance of retirement, compared to just 10 percent of all business owners.
This focus on planning could be attributed to the fact that half of all Millennials have a dedicated advisor assisting them with retirement planning, compared to 43 percent of all business owners.
"It's promising that Millennials are so focused on retirement and want to do more to prepare both themselves and their employees for retirement. Working with an advisor can help them achieve their personal and business goals," Carter said.