“For the thousands of small businesses that make up such a large portion of America’s businesses, offering a retirement plan doesn’t have to be a ‘someday’ item. With the right advice and support, entrepreneurs can discover how the benefits outweigh the perceived obstacles.”
Millennial small business owners (with an average age of 37) are most likely to consider offering a retirement plan essential; 77% call it a business necessity. Fewer respondents from Generation Z (67%) and Generation X (57%) share this view, with Generation X being the least willing to offer a plan despite being closer to retirement age.
Among small business owners without a pension plan, a gender gap emerged, with 51% of women saying their business was ready, compared to 64% of men.
The main barriers cited were cost (36%), the belief that their company is too small (34%) and lack of administrative resources (32%). Of those without a plan, 61% said they would seek advice from a financial advisor – a step more common among men (76%) than women (58%) – although 31% said they do not have an advisor.
Business owners who already offer a retirement plan reported fewer concerns about issues such as labor costs, technology changes and cash flow.
Eighty-one percent said they were glad they implemented a plan, citing improved employee retention (63%), morale (56%) and loyalty (44%) as the top benefits.
“We can have a meaningful impact in providing retirement access to more people if we can help educate owners about the benefits to themselves and their employees of saving for retirement,” Grimm said.
“While correlation is not causation, we can find that business owners who offer their employees a retirement plan appear to have greater peace of mind about the state of their business. The data suggests that a retirement plan can also help alleviate the concerns of some business owners, including issues such as attracting and retaining talent.”
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