Survey Says: Can Small Businesses Afford To Offer Employees Retirement Plans?
While a new study from Nationwide Financial shows 75 percent of small-business owners agree that employees of small businesses are woefully unprepared to finance their retirements, only 19 percent offer their employees a 401(k) or other employee-funded retirement plan, and just 11 percent are likely to add one within the next two years.
It's not that they don't want to offer help -- 78 percent say retirement plans help them attract qualified workers. But 69 percent say their businesses are too small to offer plans, and over 50 percent say doing so is too expensive. One reason many entrepreneurs think they can't afford a retirement plan is wrong: Nearly half (46 percent) thought a retirement plan required them to match employee contributions. That's just not so.
Why it matters to your business: 37 percent of employers are being pressured by their employees to add retirement plans. If you're one of them, you need to at least investigate your options. There are 401(k) choices today for even one-person companies, so talk to your accountant about what you can do to keep your employees satisfied, and help prepare for their futures.