Did you know that 34% of entrepreneurs have no retirement savings plan for themselves? And many do not provide retirement benefits to their employees.
Our latest infographic examines the benefits of retirement plans for small business owners and their employees.
When asked why they don’t have a retirement plan, small business owners said:
- 37% don’t think they make enough profit to save for retirement
- 21% used their retirement savings to invest in their business
- 18% plan to sell their business and use the money to fund their retirement
- 12% don’t see a need to save for retirement
- 12% don’t plan on retiring
40% of owners are not confident they’ll be able to retire before age 65.
Moreover, smaller companies are less likely to offer retirement plans for employees:
- 28% of businesses with less than 10 employees offer retirement plans
- 51% of businesses with 10-24 employees offer retirement plans
- 63% of businesses with 25-49 employees offer retirement plans
- 73% of businesses with 50-99 employees offer retirement plans
- 87% of businesses with over 100 employees offer retirement plans
Those who don’t offer retirement, cite expense, administrative burdens and lack of employee interest:
- 71% said it was too expensive to set up
- 63% said their organization doesn’t have the resources to administer the retirement plan
- 50% said employees aren’t interested
- 22% said they hadn’t thought about providing a retirement plan
- 15% said the organization was concerned about how to choose a provider
- 13% said the organization was too new
But retirement plans support employee recruitment and retention and cost employers only 2.4% of an employee’s compensation.
Of those who offer 401K plans:
- 94% said retirement benefits help drive recruitment
- 52% said retirement packages help attract better-quality employees
- 48% said departing employees cited a lack of retirement benefits as an influence on their decision
- 47% said retirement plans inspire increased employee engagement
Work with a SCORE mentor to determine the best retirement options for you and your business.
Infographic designed by Easel.ly.
Copyright © 2023 SCORE Association, SCORE.org
Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.