The Expectation of Partial Retirement Among Family Business Owners

Abstract

Decisions that the family business owner makes about retirement and succession are critical and could affect a large proportion of the work force. Compared to employees, family business owners may have more of an opportunity to retire partially, i.e., reduce the number of hours worked. The purpose of this study was to determine the characteristics of family business owners who expect to retire partially. Data on 1,155 family business owners from the 1998 Survey of Consumer Finances reveals that family business owners with more education and more income, who work more hours per week, and who have tax-deferred retirement accounts expect to retire partially. There is a direct correlation between age and those choosing partial retirement, suggesting that many family business owners expect to retire partially. Married family business owners were less likely to expect to retire partially; instead, they would retire fully. The equity in the business, type of ownership, and involvement of other family members did not affect the expectation of partial retirement.