Why do entrepreneurs have to save for retirement, this is the reason, Why small businesses do not offer retirement plans

Did you know that 40% of small business owners are not confident that they can retire before the age of 65?

Our latest infographic "Retirement in Small Business: Investing in Your Future" explores why small business owners do not save for retirement - and why they should think about it.

Entrepreneurs do not save for their own retirement


Shocking 34% of entrepreneurs have no retirement plan for themselves. The answers to why they had no plan were very different. Among the respondents:

37% do not think they make enough money to save for retirement
21% used their retirement assets to invest in their business
18% plan to sell their business and use the money to finance their retirement
12% see no need to save for retirement
12% do not plan to retire


In addition to not saving for their own retirement, small businesses are less likely to offer retirement plans to their employees.

The trend away from retirement plans for small businesses

Comparing the size of a company with its employee retirement packages, small businesses were least likely to offer retirement options.

28% of companies with fewer than 10 employees offer retirement plans
51% of companies with 10 to 24 employees offer retirement plans
63% of companies with 25-49 employees offer retirement plans
73% of companies with 50-99 employees offer retirement plans
87% of companies with more than 100 employees offer retirement plans
These statistics show that as companies grow, so does the need for retirement plans.

Why small businesses do not offer retirement plans

In a separate study, employers explained why they do not offer their employees pension plans.

71% said it was too expensive for the facility
63% said their organization does not have the resources to manage the retirement plan
50% said that the employees are not interested
22% said they did not think about retirement
15% said the organization was worried about selecting a provider
13% said the organization was too new
Despite data showing that the benefits of providing employee retirement plans far outweigh the disadvantages, there is still persistence among small businesses whose creation is to be avoided. Expenditure remains the main cause, although most employers 'plans cost only 2.4% of workers' compensation. For small businesses watching every penny, this seems reason enough.

Pensions help with recruitment and retention

While the vast majority of small businesses cite cost as the main reason for non-implementation, there are a variety of benefits associated with retirement packages that small businesses may overlook.

When small business owners offering retirement plans were asked why they chose to do so, their answers were revealing.

94% said that retirement plans drive recruitment
52% said that retirement offers help attract better employees
48% said leaving employees reported a lack of retirement benefits as an influence on their decision
47% said that retirement plans increase employee engagement
When it comes to retirement planning or the provision of retirement options for your employees, the benefits are substantial. Not only is there a clear equivalence between retirement plans and growth, but it also has a noticeable impact on the quality of employees attracted by small businesses and the commitment of those employees once they are in the team.