Are you prepared to retire? Many small business owners aren’t. Data gathered by SCORE found that the majority of these business leaders struggle to save for retirement, and in turn, are not confident they’ll be able to retire.
Small Business Owners Aren’t Ready For Retirement
In their research, SCORE found that 34% of small business owners don’t have a retirement savings plan. This means that not only do they not have a retirement savings plan, but neither do their employees.
Data from SCORE also highlights the struggles that small business owners face when it comes to retirement planning and saving, noting that 40% of business owners are not confident that they will be able to retire before the age of 65.
When small business owners were asked why they’re unable to save for retirement, here are the reasons they cited:
37% lack the profits to save for retirement
21% used any previous retirement savings they had to invest in their business
18% plan on selling their business to fund their retirement
12% don’t plan on retiring
12% don’t see the need to save for retirement
Smaller Businesses Are Less Likely to Offer A Retirement Plan
The problem with saving for retirement is no doubt much more prevalent amongst smaller businesses, and it only gets worse the smaller the business. Sadly, as many as 72% of small businesses with 10 or fewer employees don’t offer retirement plans.
Many small business owners say that they don’t own one simply because it is too expensive to set up (71%), or that they don’t have the resources to administer the plans (63%).
Employees Want A Retirement Plan
The research also cites that 50% of small employers without a retirement plan say it’s due to lack of employee interest, a contradiction to what employees are saying.
Data shows that employees do in fact want retirement plans, with a whopping 48% of individuals citing that a lack of retirement benefits influenced their decision to leave their employer.
Small business owners who do have a 401(k) plan in place see the impact it makes, with 94% reporting that having a retirement plan helps drive recruitment and retention, and 52% saying that their retirement plan attracts high-quality candidates. 47% said that retirement plans help increase employee engagement.
Statistics like these are the very reason why SaveDay was created. We make investing for retirement possible in three distinct ways: (1) Opening a 401(k) plan takes 15 minutes online, (2) There are no employer costs, and (3) We take care of all reporting and plan administration, again at no cost. We resolve the top two burdens that prevent employers from offering plans and make it easy to do so.
Our retirement plans provide the safety net that employers and their employees need for a secure future. Open your $0 employer-cost 401(k) with us today, and get the retirement you and your employees deserve!
Data included in this article comes from a SCORE infographic, which includes third-party research from SSA, Paychex, Manta, Pew, and CapitalOne.
Photo by Ketut Subiyanto from Pexels.