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.

Comments

[Lysset]

09:33 PM on 12/23/2011

That's certainly compelling. That's why I'm flying back to my hometown to get my parents and the older generation in my family that doesn't have a retirement plan on board with the new patented program called One24 which allows you to have retirement income in 24 months. I can't wait to get them on board and help them in the program. If you would like to be a part of it, I sure wouldn't miss out on the opportunity to hop on board and get on the waiting list before this program goes world wide! To join my waiting list go to www.refreshmybodynatra.124online. There is no way you can lose. Email me at [e-mail] for detailed information or any questions you may have. You will be glad to be part of this retirement team!

[Scurvydog74]

09:58 PM on 12/02/2011

401K's should have never been voluntary. What person making minimum wage in a retail organization offering a 401K is going to save any percentage of it if given a choice?

[MSROADKILL612]

11:35 PM on 11/30/2011

If it were not for the war on drugs, which you have supported or not fought against, mexico would be nice. Rent your home & live well - still only a drive from family. Oh well.

[MSROADKILL612]

11:27 PM on 11/30/2011

policy is to make it compulsory to buy equities so you can be robbed.

[MSROADKILL612]

11:25 PM on 11/30/2011

The trick with superannuation funds is not getting money in, its getting it out.

[pup sydney]

10:16 PM on 11/30/2011

When a country has zero or negative savings rate as we did for many years allooooo is anybody awake in there? This elevator has gone up and down for years with nobody in it.
Wake up and smell the roses and if you are a staunch GOP do NOT ask for a gvnmt. Pension health care bail out: pull yourself up by your bootstraps as you tell the rest of us to do. Better talk to the ghost of future Christmas mr marley is your turn.

[skippyB]

09:25 PM on 11/30/2011

Can I interject that there is such a thing as a Roth or traditional IRA where income can be put away with pre-tax or without any tax break, and it is an account that one can set up - it is not set up through an employer?
Americans should know about ROTH IRAs - even if you just put the money into a money market fund - it can be set up by an individual.
Americans will get through this. The notion of retirement as world-cruise and endless golf is not anything that attracts me. I'd rather live with a bunch of friends and meet for martinis on the porch than be some lonely coot in a huge house whose kids and grandchildren are all waiting around like vultures. The 1% have their own problems, I can imagine.

[MSROADKILL612]

04:34 AM on 12/01/2011

Hmm - too little info - but other side of the coin is you get talked out of your home cos the neighbours grumble about your lawn, for a bit of ticky tacky in florida & leave your friends

I aint downsizing for anal neighbors on principle. I dont want a lawn, i want a meadow. FU.

Forget drugs, the biggest industry by far is cheating old folks.

[MSROADKILL612]

09:00 PM on 11/30/2011

There is always jail

have been watching a trashy series on youtube - lockdown - similar genre to COPS.

horrible - they are expensive psycho factories - really hard nuts do oit easy anyway, but most are petty crims supporting a dope habit - once inside, they have them for life - as they are addicts - they break parole & whammo - back in the slammer w/ extra tacked on - no due process - very arbitrary.

Add in the 3 strikes thing, & most know they will die in jail.

Makes me want to send a box of books.

[MSROADKILL612]

08:34 PM on 11/30/2011

If the US had 100m people, there would be no problem. AmericaS natural wealth would be enough for basic SS for those who cant manage.

The notion you can overpopulate into affluence is a 1% scam.

[PaulArt]

06:20 PM on 11/30/2011

A long time back we moved from defined benefit(pension) to defined contribution(401k). That move tore the fences down for the Fat Cats to raid retirement funds. Prior to this, companies administered pension plans and were held responsible for their upkeep. The company hence had a self-interest in guarding and safe keeping our retirement funds in the pink. Not any more. With 401ks you are totally screwed. A 401k in America is a Government mandate to invest in the stock market. You can invest in money market funds but you will never retire at that rate of return. Interest rates for bank deposits are kept so low to discourage savings that they too are unattractive, ergo, give your money to Wall Street. Oh, by the way, what they did to your pension, they want to do to your Social Security as well.

[Scurvydog74]

10:03 PM on 12/02/2011

And today, all a company has to do to eliminate it's pension liability is file bankruptcy. (American Airlines?). Yet an individual has massive barriers to eliminating debt through the same mechanism. Obvious who makes the rules in America...

[shrinktalkingheads]

03:28 PM on 11/30/2011

Yeah. Well thanks for NOTHING Wall Street.

A desperate person robs a convenienc­e store of $100 and gets six years in the state pen.

A Wall Street banker robs the middle class of billions of dollars and gets a bonus.

What the hell can I do about it?

[ProgressivesLoveAmerica]

03:17 PM on 11/30/2011

yup, but I guess now is the perfect time to push auterity measures.

This is more of that you're-on-your-own rugged individualism that politicians love to preach.

Before anybody starts spewing all that rhetoric about "personal responsibility," you have to remember that all this rugged individualism has a negative consequence both for our society and our economy. There's a social contract that everybody needs to adhere to.

The kind of individualism that austerity-pushers love to preach is based on a glorified myth. In reality no person is so isolated from others that their actions do not affect other people. It's human nature that people are just naturally interdependent.

Now would not be the time to discuss all those cuts to "entitlements" in light of these facts.

[MSROADKILL612]

11:05 PM on 11/30/2011

I noticed you austerely skipped an S in austerity :)

[phils2012]

11:48 PM on 11/29/2011

Geez, and I thought the reason Republicans will not raise any taxes is so the 1%'ers will create small business jobs for the 99%. They aren't saying the small businesses can't afford to offer retirement plans. Of course members of Congress all have fat pensions, so why should they care?

[fried52]

09:44 PM on 11/29/2011

I think a lot of people were and have been doing the right things. They just didn't plan on having there wallets lifted in the last crash.

[dtjacobson]

06:56 PM on 11/29/2011

These survey results come as no surprise: the Boomer generation is woefully unprepared for retirement. It's really very sad--we (I'm part of the Baby Boom) have known that at some point we would retire, but too many of us either never learned or forgot the lessons our parents taught us about money and wealth management. Those lessons aren't difficult: Spend less than you earn. Save for a rainy day. Plan for retirement. Don't waste time blaming things (including Wall Street) you have no control over. Common sense says "Don't expect to rely on Social Security." I don't--I participate in a defined benefits pension program in a profession (public education) where there is little likelihood I'll be laid off right before retirement. I've been conservative with my investments--my 403(b) and IRAs have not made money in 10 years, but my real estate holdings are paid off and rented, and I have a paid-for roof over my head. I'm looking forward to retiring in 4 years.

Oh, and for the posters who will paste on my for being some kind of conservative Teapublican: I'm a far-to-the-left Progressive member of the 99% & a life-long Democrat. Deal with it.

[phils2012]

11:57 PM on 11/29/2011

I'm not sure if you are complaining about anything. If you are, you shouldn't be. If your residence and (rented) rental property are paid off, and you will have a public pension, you are among the 1%. Count your blessings that you worked in the public sector, where pensions have not evaporated; that is not the case for most people who worked in the private sector.