Over 56% of family business owners see themselves working in the business beyond 65 years of age.
Succession and retirement
Table 19.1 lists the main reasons given for working in the business beyond the traditional retirement age. As Romano, Smyrnios, and Dana (2000) point out, a number of individuals postpone their retirement indefinitely, thus frustrating the final stages of succession.
The challenge for all concerned with the survival of the family business is to find ways to overcome resistance to succession and succession planning.
Retirement plans
Although 84% of CEOs plan to retire within the next 10 years, very few owners are planning for this event, and just under half of them have NOT sought professional assistance in planning for retirement. This not only confirms previous findings that one-in-two owners do not have clearly defined objectives regarding their retirement (Smyrnios et. al., 1999), but also that succession and retirement for these family business owners could end up being an unplanned event rather than a well managed process.
Reconciling retirement pluses and minuses
Over 20 years ago, Danco (1981) pointed out that everyone needs a reason to get up in the morning and that retiring to something rather than from something is necessary for retirement to be interesting and exciting.
Similarly, Aronoff (1998) pointed out that for a fulfiling retirement, it is necessary to find meaning and identity in new roles and activities. Encouragingly, approximately 70% of family business owners report that the words succession, succession planning, and retirement are ones they want to hear, and over 77% indicate that in considering their business exit options, they would have something to retire to (life after the business) as against simply something to retire from (their business).
These reports paint a reasonably positive picture for both the succession and retirement prospects of the majority of family business owners.
There are, however, some significant reservations expressed by sizeable percentages of owners as shown in Table 19.2.
Since succession and retirement are questions of when and not if, these factors need to be addressed in a timely manner by family business owners and their advisers.
It is reassuring to find out that a substantial majority of family business owners (71%) believe that other family members are sufficiently sensitive to, and aware of, their needs in relation to exiting the business. Revealingly, however, 68% acknowledge that they will need to make adjustments to their lifestyle and relationship with their spouses following exiting the business.
This is a very important issue since, as Danco (1981) pointed out, successful retirement involves the complicated task of blending the needs, dreams and aspirations for the future of both husbands and wives. The challenging question that retirement raises is: Will they accommodate each other as well when leisure time is plentiful, as they had to do when it was in short supply?