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Forty-seven years ago, a rule change by the Internal Revenue Service set the stage for the 401(k)-retirement savings plan, a change that contributed to the majority of working-age individuals leveraging tax-deferred salary deductions.
Those tax-deferred deductions are more important than ever according to survey of 2,000 employed Americans commissioned by SurePayroll® By Paychex.
The research findings indicate that offering employees a retirement plan can help relieve stress for their future, which is especially important for younger generations. It also suggests employers helping employees achieve their retirement goals is good for small business growth, good for employee retention and good for the community.
How the SECURE Act 2.0 Can Benefit Small Business Owners
The Five-Year Plan Is Dead
Nearly three-quarters of survey respondents say the traditional five-year plan is less achievable today than ever before. The average American now plans for their financial future 12 years ahead, seven years earlier than years past.
Millennials—the roughly 73 million Americans born between 1981 and 1996—say that when thinking about saving for the future, they want more from their employer.
The majority (59%) of respondents—especially millennials (22%)—wish they started saving for retirement sooner. And, one in eight don’t feel prepared for retirement. A quarter of employed Americans admit that despite their efforts, they’re not close to achieving their retirement goals.
Interestingly, 53% of Gen Zers—those born 1997-2012—are just as worried as baby boomers (54%) about whether they’ll receive Social Security benefits, one factor that makes the five-year plan less achievable to them. To get a head start on saving money for the future, 57% of Gen Zers are already saving for retirement.
Small Businesses Lead the Way
While most respondents whose employer offers a 401(k) are enrolled in it (71%), one in five aren’t (19%). Employed Americans who work at a small business are more likely to enroll in their employer's 401(k) plan (82%) than those who work at a private company (72%) or public company (61%).
Half of all respondents who have not started saving for retirement yet said they’re waiting for their employer to offer or explain more about a retirement plan (50%) and 43% said they haven’t had the time to start.
Millennials’ top reasons for not saving for the future yet are also waiting for their employer to offer more information (60%) and not knowing where to start (40%). That suggests employers play an important role educating employees on the value of their retirement benefits, including contributing to their 401(k) plan. For instance, an employer can promote 401(k) benefits sign up instructions during onboarding and throughout the year.
Each dollar contributed during your 20s to a 401(k) plan can grow to $17 by the time you retire.
The Benefits of a 401(k)?
Those whose employer does offer a 401(k) plan but don’t participate in it said they need all their income for other expenses (61%) and that the employer contributions simply aren’t enough to make this option feel worthwhile (43%).
Onboarding is the most popular time to sign up (42%) and the majority (57%) of Americans who are enrolled in a 401(k) benefits plan based their decision on employer-provided materials.
Offering Retirement Plan Drives Retention
Those who do participate in a plan said that their employer’s contribution adds value (57%), doubles the value when they do match (56%) and has helpful tax benefits (49%).
Respondents who work at small businesses are especially partial to a 401(k) with an employer match (50%) as opposed to one without a match (35%) when it comes to staying at a job.
Whether or not they use them, benefits like retirement planning matter in how people think about their employer.
After health care (49%), a 401(k) plan with a match (47%) was the top non-cash benefit that would impact their choice of whether to stay with their employer.
This was followed by a 401(k) without a match (32%) and mental health benefits (29%).
Needs or Wants? Americans Re-evaluating
Employed adults look outside of the workplace for individual retirement accounts and other retirement savings accounts. Fifty-seven percent have a separate retirement account from what their employer offers, including a majority of those who utilize employer-sponsored plans (74%).
The survey also found that when thinking about their financial future, 55% of Americans said they need to reconsider what qualifies as a “necessity” to put more money toward retirement. And to help reach their goals, nearly two in five would take a second job to help put money towards their future (39%). Others would prioritize necessary purchases and cut down on impulse spending (48%) while another 46% would work extra hours at their job.
Respondents cite rising household expenses (59%), inflation (49%) and school debt (43%) as the reasons they believe the five-year plan is less achievable than ever before.
Money is top of mind for many who have big plans for the future like putting their kids through college (45%), paying off school debt (42%) and buying their dream vehicle (41%).
Forty percent also have dreams to travel and 33% want to retire with comfort.
Get Started
Small business employers can support their employees in building their future by starting a 401(k) plan for their business.
SurePayroll can guide you in setting up a Sure401k® plan to meet your business needs, whether building a plan for yourself, your business, your employees, or a combination of all three. Plus, we can help you discover the potential benefits of offering a retirement plan:
- Tax credits for your small business
- Tax deductible employer matching and profit-sharing contributions
- Pretax contributions reduce taxable income
Survey Methodology
This random double-opt-in survey of 2,000 employed Americans was commissioned by SurePayroll. The survey was conducted in August 2025 by market research company OnePoll, whose team members are members of the Market Research Society and have corporate membership to the American Association for Public Opinion Research (AAPOR) and the European Society for Opinion and Marketing Research (ESOMAR).
