Elderly small business owners are putting off retirement

Baby Boomers
Many small business owners are Boomers who don’t plan to fully retire. (Image: OJO Images/Getty Images)

On a typical Main Street in the United States, the businesses are owned by Baby Boomers. According to study results just released by Minneapolis-based Barlow Research Associates, the average U.S. small business owner is 60.3 years old—up from 59.8 in 2016—and has no immediate plans for retirement. Indeed, some do not plan to completely remove themselves from the workforce at all, the researchers said

Barlow defines small businesses as those with revenues between $100,000 and $10 million. To put a finer point on it, 57% of small business owners are over the age of 60, up from just 38% a decade ago, according to the Barlow study. However, the data show that 37% of small business owners expect to transition the ownership of their companies within the next five years. And some are staying indefinitely, if only as part-time workers.

The percentage of owners who are at least planning to retire has increased 10% since 2008. Among those planning to transition their company’s ownership, many are considering liquidating/closing their firms (34%) or selling/merging with an outside third party (30%).

However, owners who are 60 years or older and plan to transition are more likely to sell or transfer the ownership of the company to a family member than sell to a third party.

Conversely, over 7 in 10 small business owners intend to work at least part time after they retire, a trend that has become increasingly more common—especially among financially pressed Baby Boomers.

The percentage of small business owners who do not anticipate working after retirement has steadily decreased over the years—but there has been one surprising glitch: In 2017, the Barlow research staff found that the percentage of small business owners who do not intend to work after retirement had increased for the first time since 2013. “This … most likely reflects increased optimism in the financial position of their compan[ies],” Barlow said.