In years of better economic conditions, hard-working individuals who had invested their labor and their money into their own businesses usually knew those companies were essentially their own retirement plans – cash in, move on to that beach and enjoy some sunny golden years.
During the last four years of economic decline, entrepreneurs have found that the easy exit strategy isn't neccessarily the same as it was. Like their real estate investments, their businesses are frequently upsidedown in value and many are finding themselves working into their 70s as a result – in jobs where seven-day-a-week schedules are normal.
As the Wall Street Journal reports, very low and slow growth in revenue in once-hot industries such as real estate and construction has forced many into a kind of "business purgatory," a Catch-22 that keeps them forever unable to retire yet unable to see tangible economic improvements on the horizon.
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More than a third of small business owners polled by the news company said that they've readjusted their retirement expectations as a result, accepting the fact that they'll probably be working longer. And more than half admit the value of their business itself is their retirement savings plan, a dangerous prospect.
Take the example of Judy Lawton, who has run a staffing company for almost 30 years, and is hoping to be able to transition to retirement. Lawton told the Journal that her revenues are down approximately 60 percent from where they were pre-recession, that she's had to cut 20 positions and that she's back to working 12-hour days to make ends meet.
When she recently tried to put the business up for sale, the offers she got were miniscule and she turned them down.
"You don't work for almost 28 years at building a company and give it away," she told the Journal. "The economy has stolen my retirement."
The small business marketplace has shrunk considerably in recent years, with business values down 25 percent from four years ago, and sales traffic in business buyouts is down as much as 40 percent.
As stated in related study released by the Employee Benefit Research Institute, the delay in retirement has become a given for most American workers – but even non-entrepreneurs are finding that working to 70 or beyond might not be enough.
The study suggests that about a third of the households in America, with younger- to medium-aged workers (aged 30 to 59) simply won't be able to generate the proper retirement savings they'll need, even if they continue working until 70. Low-income workers are particularly at risk.
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