Small and medium business owners in Australia are encountering significant challenges as they approach retirement, according to recent research by NAB Private Wealth. The study highlights that many of these entrepreneurs continue working beyond the traditional retirement age due to financial constraints and a lack of succession planning.
Michael Saadie, an executive at NAB Private Wealth, noted that the dynamics of business transition are evolving. "For generations, small business owners expected family members to take over, but that reality is shifting, leaving many unprepared for retirement," he stated. This shift is attributed to younger family members pursuing careers in other industries or being deterred by the complexities of managing a modern business.
The report reveals that 46% of small and medium enterprise (SME) owners expect to work after turning 67. Many anticipate that their retirement will lead to the closure or sale of their businesses outside the family. Only a minority foresee a family member taking over.
Saadie emphasized the importance of having a structured succession plan: "At such a pivotal time, this shift makes it critical for business owners to have a well-structured succession plan, so they have certainty over what happens to their business when they retire."
Financial concerns also play a significant role in these decisions. Many business owners cite financial reasons for continuing work past 67, underscoring the need for early financial planning.
Joe Rinaldi's experience mirrors these findings. After owning and managing a Mazda dealership in Sydney's northern beaches, he opted for a clean sale rather than passing on his business within his family due to various challenges. "My advice to small business owners is to start planning early," Rinaldi advised.
Despite some progress in wealth transfer planning among SMEs—where one-third have documented plans—many remain without formal strategies or reliable advisory relationships.
"By building out comprehensive wealth transfer strategies, business owners can achieve financial security and leave a lasting legacy for future generations," Saadie concluded.
NAB's insights come from its "Beyond the Business" report on navigating retirement and succession for small businesses. The bank continues its support with resources available online.