Retirement Preparation In U.S. Reaching Crisis Levels, Small Business Owners Say
Americans are unprepared for retirement, so much so that it's reached crisis levels, according to the majority of small business owners.
Seventy-five percent of small business owners said that Americans are so financially unprepared for retirement that it's becoming a crisis, according to a survey by Nationwide Financials released Monday. Still, less than 20 percent of small business owners say they offer employees a 401(k) or other employee self-funded retirement plan.
Americans are becoming increasingly concerned about retirement as the economic downturn stymied income growth and wreaked havoc on investments such as stock portfolios and homes. One-quarter of middle-class Americans said they don't think they'll be able to afford to retire until they're 80, according to a recent survey from Wells Fargo. And two-thirds of Americans ranked not having enough money for retirement as their top financial concern in a recent Gallup poll, up from 53 percent 10 years ago.
Despite the retirement anxiety, only 11 percent of small business owners said they plan to offer an employee-sponsored 401(k) plan in the next two years, the Nationwide survey found. And while nearly 80 percent of small business owners say having a retirement plan is important for attracting more qualified employees, more than half say it's too expensive.
That's why some members of congress are trying to get a bill passed that would encourage small business owners to pool their resources and offer plans that are less expensive than single employer plans, potentially making some of the administrative responsibilities easier, according to Nationwide officials.
But the U.S. isn't the only country where small business owners are struggling to offer retirement options. Due to the economic climate, the British government recently decided to delay auto-enrolling workers at businesses with fewer than 50 employees in pension programs by one year, according to the Telegraph.
CORRECTION: An earlier version of this post misstated the share of Americans who said they won't be able to afford to retire until they are 80. One-quarter of Americans said they don't think they'll be able to afford to retire until they are 80, according to a Wells Fargo survey.