Data & Research February 4, 2008

Many Wealthy Business Owners Don’t Have Succession Plan

The majority of wealthy business owners have no succession plan in place, but many want to keep working.
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A survey commissioned by PNC Financial Services Group, Inc. finds that only one-third of business owners have a written succession plan in place to transition their business to family or other associates. “Business owners who have put a lifetime into their work often have a mindset that ‘no one can run this business better than I can,'” said Jonathan Lander, J.D., L.L.M., a senior wealth planner and vice president of PNC Wealth Management, in a news release about the survey.

While that may be true, 43% of affluent business owners, almost double that of affluent Americans who do not own a business, said they want to work until age 70 or later and 54% of those said their main reason was “I enjoy working and don’t want to stop.” This was followed by 20% who said, “My work is a big part of who I am;” 10% who said they want to work “to maintain my current standard of living in my retirement;” and 8% who indicated, “I fear I will be bored in retirement.”

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Sixty-one percent of affluent business owners strongly or somewhat agreed with the statement, “I will continue to work, no matter how much money I have,” while only 27% of non-business owners said the same.

The Wealth and Values Survey was conducted online within the United States by Harris Interactive in September and October 2007 among a nationwide cross section of 1,509 adults (age 18 or older), including 587 business owners with annual incomes of $150,000 or above (if employed), at least $500,000 of investable assets (if employed), or at least $1 million of investable assets (if retired).

A report of survey highlights can be accessed here.

Data & Research February 4, 2008

Savers Least Confident about Retirement Preparedness

Individuals who save more and are more active in managing their retirement savings are less confident in their retirement security and the retirement decisions they make than are individuals with lower savings rates.
Reported by

In examining the relationship between savings confidence and actual savings behavior, a study released by MassMutual Financial Group found only 44% of high savers (deferring 8% or more of their savings into a 401(k) plan) expressed confidence in their decisions, compared to 54% of low (deferral rates of less than 4%) and medium (deferring between 4% and 7.99%) savers. The study found high savers are more concerned that they will not have enough saved for retirement (44%) compared to low and medium savers (32%).

Sixty-five percent of high savers indicated they are not sure their investment decisions are the right ones for them, as did 60% of low and medium savers, the release said. In addition, those who are more active in managing their retirement savings (79%) are also more eager for help and information about investments and investing versus those who are less active (47%).

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“The lesson is that some of the traditional assumptions about investment confidence, like deferral rates and active investment decisions, may indicate the exact opposite,” said Ian Sheridan, corporate vice president and chief marketing officer for MassMutual’s Retirement Services Division, in a press release. “We cannot assume that someone who saves aggressively and actively manages those savings is confident or secure in their financial situation.”

The study was conducted by Massachusetts Mutual Life Insurance Company using participants visiting the MassMutual Retirement Services Division Web site in September and October 2007. In total, the survey was completed by 17,414 individuals, participating in one of 2,300 retirement savings plans included in the study.

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