Retirement Realities (Ouch)
Why don't entrepreneurs save more (and start saving earlier) for retirement? A survey by accounting firm Grant Thornton suggests one reason: that business owners and executives don't have a clear sense of how much they'll need to support a comfortable retirement lifestyle. Grant Thornton's benchmark calls for annual income of 70% to 80% of the amount a retiree earned in the last year worked. Yet the average respondent believed 60% would be adequate:
What percentage of your final-year earnings do you believe you will need annually to live comfortably in retirement?
7% of all respondents said they'd need 1% to 25%
35% said they'd need 26% to 50%
44% said they'd need 51% to 75%
14% said they'd need more than 75%
Source: A survey of 1,469 executives at midsize companies, Grant Thornton, May 1993.* * *