Jamie Dimon Warns a $10 Trillion Small-Business Retirement Wave Is Straining the American Dream
Jamie Dimon, JPMorgan Chase's chairman and chief executive, said the American Dream remains alive but is moving out of reach for a growing share of the population and future generations, Fortune reported, according to TheStreet.
He made the comment on March 31 while launching the bank's American Dream Initiative.
The initiative includes nearly $80 billion in small-business lending pledged over 10 years, along with transition advisory services and philanthropic funding aimed at business owners nearing retirement, TheStreet reported.
Six months later, JPMorgan has put numbers behind the warning.
Succession Planning Falls Behind
JPMorgan's new report, titled "Powering 10 Million Small Businesses," surveyed 1,000 business owners. Seventy percent described themselves as in the early stages of succession planning.
Only 8% said they had reached an advanced stage, Fortune reported, according to TheStreet and Yahoo Finance.
The scale is large. Roughly 12 million businesses, holding $10 trillion in combined assets, are expected to change hands over the next decade, Benzinga reported, according to TheStreet's coverage.
The risk is not spread evenly. In industries JPMorgan classifies as critical to national security, more than half of firms currently have an owner age 55 or older, TheStreet reported.
A Retirement Savings Shortfall
Americans typically estimate they need between $1.2 million and $1.4 million saved to retire comfortably, according to The Motley Fool. Actual savings fall well short of that.
Average retirement savings for people ages 56 to 64 run about $540,000. For ages 65 to 74, the average is roughly $610,000, per the Fool's analysis of the data.
Median figures tell a starker story. The median for ages 56 to 64 is about $185,000. For ages 65 to 74, it's roughly $200,000, the Fool reported.
That gap between averages and medians shows a small group of wealthier savers pulling the average up. Most people are falling further behind than the top-line numbers suggest.
Similar findings appear in networth.com's coverage of how retirement confidence has declined nationally.
No Plan for What Happens Next
Separate Gallup data cited by the Fool found that among businesses run by a single owner, 27% plan to simply shut down once that owner retires. Another 40% said they have no idea what will happen to the business at all.
Single-operator businesses like these account for roughly 30 million enterprises nationwide, per the Fool's reporting. JPMorgan's American Dream Initiative, including its lending pledge and advisory services, is aimed squarely at that gap.