Most Small Businesses Don't Offer 401(k), Some Don't See the Value
Only 28% of small business owners are offering a 401k plan for their business, with 6% planning to add one soon, according to the August 2016 SurePayroll Small Business Scorecard.
In line with that, 34% of small business owners see a 401k as the primary way they'll save for retirement.
Of those not offering the work-sponsored retirement plan, 42% said they don't see the value in it. Another 35% said the fees are too expensive and 23% said they don't know how to manage it.
The data suggests a lack of education on how 401k plans work for a small business. Only 6% of those offering a 401k said they do it for the tax breaks.
Outside of a 401k, business owners said named the following as their primary methods of saving for retirement:
- Earnings from business (25%)
- Roth or Traditional IRA (14%)
- Stocks, bonds and cash outside of a retirement account (9%)
For more stats on saving for retirement and how small business owners are feeling about the economy, see our infographics below.
SurePayroll offers a variety of 401k plans to small businesses, including Safe Harbor.