Nearly 40% of Canadians plan to start a business in retirement
By National Underwriter
By Warren S. Hersch
Nearly four in 10 Canadians envision becoming entrepreneurs during their retirement years, according to a new report from Toronto-based BMO Financial Group.
The report reveals that 39 percent of Canadians say that it is likely they will start their own business after they reach retirement age (65 years old). More generally, 81 percent plan on working in some capacity during their retirement.
The top reasons identified by Canadians for starting their own business in retirement, the study finds, include:
- The need for additional income (75 percent of respondents)
- A desire to stay sharp/mentally focused (62 percent)
- It would be an enjoyable hobby (53 percent)
“Additionally, with the decline in employer-sponsored defined registered pension plans and reforms to government pension plans, there's now a greater need for people to supplement their income during retirement to compensate for that income gap,” she adds. “This is particularly true for those who haven't been saving aggressively for retirement through retirement savings vehicles such as RRSPs and TFSAs."
Among the study’s other key findings:
- Men are more likely than women to start their own business in retirement (46 percent vs. 33 percent);
- Those in Alberta are the most likely in Canada to start their own business in retirement (53 percent); Quebecers are the least likely (25 percent).
- A separate savings account earmarked for a business (43 percent);
- A loan from a bank or another source (34 percent);
- Their inheritance (21 percent);
- Family/friends (14 percent).