NEW YORK (MainStreet) -- U.S. small businesses -- 28.4 million strong, according to the U.S. Small Business Administration -- have a well-earned reputation as the engine that drives the U.S. economy. The SBA reports domestic small businesses accounted for 56% of all U.S. jobs in 2012, the last time Uncle Sam ran the numbers on the issue.
It's ironic that even though the small business sector is so healthy and vibrant -- and contributes so much value to the U.S. economy -- many small business owners still seem to be poor stewards of their own household economies.
Case in point - a study from TD Bank shows 47% of U.S. business owners state they have no retirement plan in place, and another 25% said they would simply close the business, no matter what the financial and employment ramifications.
"Building a small business is hard work, and it can be easy to get caught up in daily tasks such as paying invoices or increasing sales, but smart business operations need to consider the future, including the retirement of the owner," notes Jay DesMarteau, head of small business banking, at TD Bank. "Just as those in the workforce should invest in themselves through retirement savings, business owners need to have conversations about retirement and prepare for the future to ease the transition, whether that be closing or selling the business or passing it on to family member."
A similar study from Springfield, Mass.-based MassMutual states that nearly 40% of business owners "don't have a retirement income strategy outside of their businesses and will rely on proceeds from the sale of the business or income from the business post-retirement."
What is up with otherwise savvy, money-making small business owners?
Some experts say it's a matter of being a maverick in the first place, and not getting any support from a corporate employer. "So many people in the small business world find themselves scrambling for retirement," says Miranda Bonde, a financial advisor with Futurity First, in Green Bay, Wis.
Bonde believes most small business owners struggle with this for two reasons - cash flow and lack of forced savings. "Generally when folks are employed with larger companies, there are benefits such as retirement savings plans," she says. "Most small businesses owners don't have that, and as years go by retirement savings continue to fall by the wayside. Cash flow is another reason, when owning a small business, most owners tend to put as much money back into the business to keep it going and growing, rather than setting some aside for savings."