Millions of Small Business Owners Face Retirement Crisis

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Australia could be heading toward a retirement crisis — and it's hiding in plain sight, especially among the country’s smallest business owners.

New research from AMP Bank has found that nearly half of small business operators aren't regularly contributing to their own superannuation. The survey, which focused on businesses with four or fewer employees, showed that only 55% are putting money into their super on a regular basis.

That’s a stark contrast to the rest of the workforce, where about 90% receive guaranteed super — now bumped up to 12% of their income.

Why the gap?For sole traders and self-employed Australians (who make up the bulk of small business owners), super contributions aren’t compulsory. Many say they’re focused on reinvesting in their business or juggling tight cash flow, especially in the early years.

“It’s understandable that many small business owners prioritise their business — it often comes at the cost of super,” said John Arnott, AMP Bank’s GO Director.“Paying yourself a wage can be hard enough, let alone setting aside extra for super.”

But neglecting super now could mean big trouble later.AMP’s modelling found that just $100 a week into super from age 30, assuming a 6% annual return, could grow to over $500,000 by the time you hit 65. That’s the magic of compound interest — small amounts can snowball over time.

Arnott’s advice? Try to strike a balance between your short-term business goals and your long-term financial future. And take advantage of the tools already at your fingertips.

“Resources like the ATO website or your banking app can help automate contributions and give you clearer insights into your cash flow,” he said.“Even small, regular super payments can make a huge difference over time — plus, the system offers real tax advantages for long-term investing.”

So if you’re a sole trader or running a micro-business, it might be time to give your future self a bit more attention. Because when it comes to retirement, a little now can go a long way later.

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