Inflation has some business owners rethinking their retirement savings

Supply chain issues and inflation are affecting business owners’ bottom lines — and their retirement accounts.

According to a TD Wealth survey of more than 700 business owners with $100,000 in investable assets and more than one employee, inflation is a top concern for business owners. Economic uncertainty followed in second place.

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These concerns have prompted some entrepreneurs to change their retirement plans. Nearly two-thirds of respondents said they adjusted their retirement plans in the last year, with nearly one-third saying they changed their asset allocation and another three-tenths saying they delayed retirement, with the same percentage saying they had changed their asset allocation. people said they lowered their contributions to their retirement savings.

These concerns are not far-fetched. Inflation hit a 40-year high last year and supply chain problems have caused shortages in everything from baby formula to garage doors.

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Younger business owners are more likely to make a change. Half of business owners age 55 and older say they have changed their retirement plans, compared with 70 percent of business owners ages 18 to 34 and 70 percent of business owners ages 35 to 54 74%. The vast majority (90%) of those survey respondents said they still believe they have enough savings to sustain themselves in the future.

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The majority (82%) of these survey participants work with a financial advisor, and these investors are more likely to feel confident in their retirement goals than those who do not (but only slightly – 83% feel more confident working with an advisor in retirement, compared to 75% without an advisor). These financial professionals may also suggest new ways to save for the future, including investment opportunities in digital assets and retirement portfolios such as ESG funds.

Investors are better off if they have a plan for their money and retirement, said James Beam, senior vice president and head of investment management, brokerage, planning and strategy at TD Wealth. “Without a plan or an assessment, it’s very difficult to determine where you are,” he said.

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