Last week I got a sobering reminder about one of the financial pitfalls of running a small business: I went online to check my retirement account and was stymied because the system didn’t recognize my computer.
I have owned that computer since 2009. So in other words, at least six years had passed since I had last checked in on my retirement savings.
No matter how we dice it, small business owners are often negligent when it comes to preparing for retirement. Countless surveys confirm this.
When I left my job in 2008, I knew I was taking a financial risk. But the risk I may have underestimated was the toll it would take on my retirement-savings efforts.
Saving for retirement had always been a big deal to me. Throughout my career I socked aside as much as I could from every paycheck, and I smiled each year at the progress I’d made.
All that ended the day I gave up employment. Bi-weekly contributions to a 401(k) plan gave way to vendor bills and “investing back into the business.” Now, suddenly, I find myself seven years older but certainly not seven years richer.
A 2015 survey by TD Bank found that a quarter (26 percent) of small business owners are not confident they’ll have enough savings to retire comfortably. Concern was most acute among baby boomers, who launched their business at an average age of 43, versus an average age of 26 for millennials.
What got me thinking about retirement again was Facebook. In recent months, I’ve seen a growing number of my former coworkers posting (gleeful) retirement notices. I, too, would like to hang it up some day.
Financial planners who work with small business owners say one of the mistakes owners make is assuming that, when retirement comes, they’ll sell their businesses and cash out big. And while a small business can certainly be counted as a financial asset, many sell for far less than their owners anticipate, assuming they can be sold at all.
Those who read my Shop Talk column know that each fall I plan something big for the coming year. Well, guess what; I’m hoping to make 2016 the year I get back on track with my retirement savings. In fact, I’ve already started.
As my business grows, I simply can’t afford to keep putting myself last. Maybe it will mean taking fewer clients to lunch. (Yes, those meals add up.) Maybe it will mean putting off some other things I’d like to do. Whatever the cost, I’ve got to start paying it. Owning a small business is risky enough. I am no longer willing to risk it all.
Glenn Burkins is editor and publisher of Qcitymetro.com. He is a former Wall Street Journal reporter and Charlotte Observer business editor.