Small Business Owners Need a Retirement Savings Plan
Data gathered by small business mentor SCORE shows that 34% of small business owners do not have retirement savings plans for themselves, and 40% of business owners are not confident that they will be able to retire before the age of 65.
SCORE data also shows that the smaller the business, the less likely it is to offer a retirement plan to its employees. 72% of businesses with 10 employees or fewer do not offer retirement plans to their employees.
Many small business owners say they lack the profits to save for retirement, or have used their previous retirement savings to invest in their own business.
Businesses that do not offer employee retirement plans cite expense, administrative burdens and lack of employee interest as barriers.
Despite business owners’ concerns about expense, retirement savings only cost employers 2.4% of an employee’s compensation, on average.
Furthermore, retirement plans support employee recruitment and retention:
- 48% of departing employees said a lack of retirement benefits influenced their decision to leave.
- 94% of small business owners who offer 401(k) plans report that these plans drive recruitment and retention.
Credit unions have options
These days, credit unions are offering affordable options for retirement savings. These not-for-profit, member-owned organizations offer the options, and the personalized service, that small businesses need to thrive.
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