The strong business acumen that makes business owners successful often translates into personal finance. According to the 22nd Annual RBC RRSP Poll, retiring Boomer business owners do a better job of financial planning and are far more active in preparing for retirement compared to the average Canadian
The poll found that more than half (54 percent) of retiring Baby Boomer business owners regularly review, update and keep their financial plan in mind when they are about to make key financial decisions. In contrast, just 38 percent of Canadians in general can say the same. As a result, almost two-thirds (65 percent) of retiring Boomer business owners are confident their savings are where they should be, compared to 51 percent of the rest of Canadians who think they are at or ahead of their retirement savings goal.
“Due to their entrepreneurial mindset and the fact that they must take care of themselves financially in the future, retiring Boomer business owners see financial planning as a priority,” said Michael Feaver, senior manager, Strategic Initiatives, RBC in a statement. “Overall, they do a better job of retirement planning and start investing at an earlier age, which gives them greater flexibility and control during their retirement years. Your business requires a strong grasp and long-term view of its finances; your personal finances should be no different.”
The survey found retiring Boomer business owners are approaching retirement with a different financial priority in mind compared to the average Canadian; their focus is on saving for their retirement versus making payments to reduce debt which is the main priority of the average Canadian.
There is one key similarity between the groups: both retiring Boomer business owners and the rest of the Canadian population say they have increased the amount of money they believe is necessary to retire and live a comfortable lifestyle. Retiring Boomers who own a business have increased their estimate of what is needed to retire by 16 per cent to $1.1 million from $968,000 in 2010; the estimate for Canadians in general has jumped by 19 per cent to $778,000 since 2010.
“Retiring Boomer business owners are more self-reliant and have invested their time as well as their money in preparing for retirement,” said Jason Round, head, Financial Planning Support, RBC Financial Planning. “With Canadians now spending an average of 15 to 20 years in retirement, it’s important to take the time to understand what it will take to live comfortably and enjoy the lifestyle you want. A financial planner can help get you on the right track and address the challenges of retirement planning, whether you own a business or not.”
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