OMAHA, Neb.--(BUSINESS WIRE)--As many as 15 million Americans1 don’t have to report to “the man” as owners of their own businesses but, as appealing as that might sound, there are trade-offs – especially when it comes to saving for retirement, according to a survey from TD Ameritrade Holding Corporation (NYSE:AMTD).
What keeps them from reaching their savings goal? Fifty-one percent said they want the next President to reduce healthcare costs with 26 percent saying rising healthcare costs have reduced their ability to save and 35 percent adding the rising cost of health insurance has hurt their business.
Self-Employed Not a Priority for Next President?
But the self-employed are largely not expecting any relief from the 45th U.S. President since 64 percent do not expect their needs to be among his or her top five priorities. In fact, over half (57 percent) think political and economic changes over the past three to five years are impacting their business. A higher minimum wage could add to their woes:
- 40 percent do not support a $15 minimum wage hike; 30 percent believe it could negatively affect their business
- 20 percent feel the effects of government regulations have worsened compared to three to five years
Anxiety Running Higher Among the Self-Employed
Most (76 percent) were traditionally employed before they set up their own businesses and most (77 percent) figure they could still be traditionally employed if they wanted. They remain self-employed despite rising anxieties:
- 61 percent are more anxious about saving money for retirement now
- 59 percent are more anxious about earning a steady income from their business
- 53 percent are more anxious about expanding their business
The Real Cost of Self-Employment
Fifty percent are willing to make sacrifices. For example, 63 percent say they don’t have the benefits of traditional employment (i.e. paid vacation, better health benefits package, better insurance, professional support). Further:
- 52 percent have had to work long hours
- 41 percent are never able to completely turn off work / relax
- 40 percent have had to cope with constant financial pressure
- 39 percent have had to prioritize their business over their personal life
- 30 percent have had to spend less time with their family
Goal Planning for the Self-Employed
While 55 percent say they are saving for retirement (when they can), the average self-employed American saves $415 per month for non-retirement items such as the following:
- 45 percent are saving for an unforeseen emergency
- 32 percent are saving for vacation
- 22 percent are saving for home improvements
- 16 percent are saving for college / education costs for a child
Over half (55 percent) say they are behind in saving for retirement and 48 percent say the inability to predict income is a problem with 41 percent saying they do not make regular contributions to savings. The majority (69 percent) do not have a specific savings goal in mind, nor do they have a backup plan for what to do if they don’t have enough when they retire. Seventy-six percent simply say they’ll continue working if they can’t save enough and 51 percent count on social security or government pensions.
Of the 31 percent who have a goal in mind, they say they will need $1 million in order to retire – the same goal revealed in 2013 in TD Ameritrade’s last self-employed survey.
“Many of the self-employed recognize how important retirement savings is, but they’re more likely to be living in the here-and-now, and they have unpredictable income that can make savings a challenge,” said Dara Luber, senior manager of retirement at TD Ameritrade, Inc., a broker-dealer subsidiary of TD Ameritrade Holding Corporation. “Business owners are sometimes put off by what they perceive as the hassle and costs of plan administration, but it may be easier and more affordable than many believe - and can include tax benefits.”
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1: Bureau of Labor Statistics, US self-employed population of 14,992,000. http://www.bls.gov/news.release/empsit.t09.htm
About TD Ameritrade Holding Corporation
Millions of investors and independent registered investment advisors (RIAs) have turned to TD Ameritrade’s (NYSE: AMTD) technology, people and education to help make investing and trading easier to understand and do. Online or over the phone. In a branch or with an independent RIA. First-timer or sophisticated trader. Our clients want to take control, and we help them decide how - bringing Wall Street to Main Street for 40 years. An official sponsor of the 2014 and 2016 U.S. Olympic and Paralympic Teams, as well as an official sponsor of the National Football League for the 2014, 2015 and 2016 seasons, TD Ameritrade has time and again been recognized as a leader in investment services. Please visit TD Ameritrade's newsroom or www.amtd.com for more information, or read our stories at Fresh Accounts.
Source: TD Ameritrade Holding Corporation
About Head Solutions Group
Head Solutions Group (U.S.) Inc., is a leading market research partner for Financial Services companies in North America. With offices in New York, Toronto and Montreal, Head delivers the deep customer insights that increase institutional knowledge and propel business action. TD Ameritrade and Head Solutions Group are separate and unaffiliated firms and are not responsible for each other’s services or policies.
About the 2015 Self-Employed Survey
An online survey was conducted with 1,505 U.S.-based self-employed adults aged 18 or above by Head Solutions Group, between September 29 to October 9, 2015, on behalf of TD Ameritrade Holding Corporation. Sample was drawn from major regions in proportion to the U.S. census. The statistical margin of error for the total sample of N=1,505 adults within the target group is +/- 2.5% (assuming that participants are the same as non-participants). This means that, in 19 out of 20 cases, survey results will differ by no more than 2.5 percentage points in either direction from what would have been obtained from the opinions of all target group members in the U.S.