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Most Small Businesses Don't Offer 401(k), Some Don't See the Value

Posted On
9/6/2016
By
Stefan Schumacher

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.

primary-way_infographic


surepayroll-scorecard_aug-2016

SurePayroll offers a variety of 401k plans to small businesses, including Safe Harbor.