Millennial small business owners were found to have a higher appreciation of the importance of saving for retirement and the need for workplace retirement benefits compared to their older peers, according to a new survey.
Nationwide’s 2018 Annual Business Owners Study reveals that Millennial business owners are nearly twice as likely as the average owner to offer retirement benefits to their employees in the future — 69% versus 36%.
Additionally, Millennials are supposedly more likely to feel it is their responsibility to help their employees save for retirement (57%) versus less than a third (31%) of Boomers and 44% of Gen X business owners. The generation also recognizes the importance of a workplace saving plan for their own retirement savings, with 53% of Millennials saying so, compared to only 39% for Boomers.
The current business climate may have something to do with the findings. Most business owners (61%) report that they are expecting better sales this year, including 64% of Millennial business owners. And considering the tightening labor market, 51% of Millennial business owners agree that offering a retirement plan helps them with recruiting and retention, compared to 44% and 31% for Gen X and Boomers, respectively.
“Millennials grew up during the Great Recession a decade ago, which significantly impacted how the generation spends, saves and manages their money and businesses,” notes John Carter, president of retirement plans for Nationwide. “Now, they are planning ahead and taking actions that could help them and their employees achieve financial security in retirement.”
More Millennials reportedly are also seeking out retirement planning advice. According to the findings, 50% of Millennials employ the use of a retirement planning advisor, compared to only 4 in 10 small business owners overall.
And of those who do work with a retirement planning advisor, only 38% report conversations happening once a month or more frequently. Most conversations take place “every couple of months” (39%) or once a year (22%).
Tax Reform’s Impact
Attitudes on the impact of tax reform also vary across generations. Overall, nearly half (49%) of all business owners will not take any action with their retirement benefits due to tax reform. However, only 16% of Millennial business owners said that they planned to take no action, compared to 67% of Boomers.
Conversely, nearly a third (32%) of Millennial business owners said they will increase retirement contributions due to tax reform, compared to just 18% for all business owners. What’s more, 25% of Millennial business owners who plan to offer retirement benefits say enactment of tax reform made it possible for them to do so, compared to just 19% of all business owners.
As to general attitudes about retirement, small business owners seem to be in general agreement that America’s workers are facing a retirement readiness crisis. While this is an often debated topic within policy circles, these survey results show that 67% of small business owners overall agree that there is a crisis. Interestingly, the level of agreement goes up with generational age, such that 62% of Millennials, 65% of Gen X and 71% of Baby Boomers agree.
Yet, when asked what benefits they offer, only 27% of respondents reported that they offer retirement benefits; overall, 36% of respondents said they do not offer benefits of any kind.
Edelman Intelligence conducted the online survey on behalf of Nationwide during the period April 9-20, 2018, among 1,000 U.S. business owners. Business owners are defined as having between 1-499 employees, being 18 years or older and self-reporting as either a sole or partial owner of their business.