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Benefits May 16, 2007
Cost Greatest Retirement Plan Barrier for Micro-Business Owners
May 16, 2007 (PLANSPONSOR.com) - About 80% of
micro-businesses do not offer retirement plans to their
owners or employees, and only 5% of micro-businesses say they
plan to offer a retirement plan in the next year, according
to the findings of a survey by the National Association for
the Self-Employed (NASE).
Reported by Adrien Martin
The survey of more than 3,000 employers with 10 or fewer employees found that the cost of administering and contributing to a retirement plan is the biggest hurdle to offering them, with 62% citing it as the greatest barrier. Of the respondents that offer the plans, more than half handle the administrative legwork themselves.
More the one third of micro-business owners are not saving for retirement at all, and one in five owners of these businesses are not sure when they will have enough to retire. Nearly 13% have no savings at all and 26% have less than $50,000 saved. However, nearly 29% believe they will need at least $1 million in savings before they can retire.
Over three-quarters of micro-business owners are relying on the federal government as their primary source for financing retirement, with Social Security being the most frequently mentioned income source.