According to the 2002 Nationwide Financial Survey of High-Income Professionals. Nearly three-quarters (72%) of the entrepreneurs and more than two-thirds (67%) of the whole group said retirement income planning was important.
But actually doing that planning may prove tough sledding for some entrepreneurs if they don’t completely understand how to make best use of the most common investment vehicles.
The survey found that the business owners lagged the respondents as a group in rating their knowledge level about seven out of seven financial products asked about including 401(k) accounts. Only 54% of the entrepreneur group proclaimed themselves very knowledgeable about 401(k)s compared to 67% of the whole sample.
The business owners also rated their knowledge about other products. They claimed to be “very knowledgeable” about:
- Individual retirement accounts, 55% of business owners versus 61% of all respondents
- Mutual funds 54% of business owners versus 60% of all respondents
- Stocks 46% of business owners versus 54% of all respondents
- Bonds 27% of business owners versus 35% of all respondents
- Variable annuities 14% of business owners versus 21% of all respondents
- Fixed annuities 19% of business owners versus 24% of all respondents
Using a Planner
When asked about obtaining advice from a financial planner, the entrepreneurs were more likely than other wealthy professionals to go to an accountant for aid (55% versus 47%).
Business owners also change sources of advice more frequently, with 30% having never changed advisors. Some 47% of the other professionals say they have never changed main sources of advice.
The survey covered 500 people with annual household
incomes of at least $150,000 per year. Respondents were
younger than age 60 and were either engaged in financial
planning or intending to be involved in it in the near