The hoard of supply chain issues brought on by the COVID-19 pandemic pressed business operations for millions of employers, and now new research finds it’s affected retirement planning, too.
An annual survey of third-party business owners by TD Wealth found the combination of inflation and supply chain challenges has derailed retirement plans over the last 12 months. According to the data, 54% of business owners surveyed said their business has been negatively impacted by inflation and supply chain problems in the last year, and 31% have considered moving the location of or selling their business to offset rising costs. As a result, nearly two-thirds (65%) of business owners changed their retirement plans in the past year, including changing their asset allocation (31%), postponing retirement (30%) and lowering contributions toward their retirement (30%).
Business owners ages 18-34 (70%) and 35-54 (74%) were more likely to amend their retirement plans compared to older business owners over age 55 (50%). Overall, 95% of business owners are concerned in achieving their financial goals.
As inflation continues to afflict people’s wellbeing in 2023, 63% of respondents are claiming it is their top concern, followed by economic uncertainty (56%).
“Record inflation and supply chain troubles have presented significant challenges for business owners, and while both show signs of improvement, the impacts will be felt into 2023. Business owners are depending on registered financial professionals to weather short-term volatility and help with the long-term success of their financial plans,” said James Beam, SVP, head of Investment Management, Brokerage, Planning, Retirement & Strategy, in a press statement.
Amid the market turmoil, business owners are turning to new investment strategies and financial advisors for support on their retirement planning.
63% of business owners report exploring a new investment opportunity for their retirement portfolio, including digital assets (43%), private markets (40%) and environmental, social and governance (ESG)-focused investments (30%). Among business owners who work with a financial advisor and have explored new investment opportunities, 80% received these investment recommendations from their advisor. Additionally, “ideas for new investment opportunities” was cited as the number one most useful piece of content from financial advisors among owners who work with them.
Eighty-two percent of business owners report working with a financial advisor, and over three-quarters (77%) who work with a financial advisor and considered moving or selling their business reported that they consulted their financial advisor about these actions.
Additional findings from the study can be found here.
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