Small business owners can have a lot of self-confidence when it comes to retirement planning.
Most entrepreneurs do not think their businesses are big enough for retirement plans. Others think it would be too expensive to implement retirement plans. More than a third just plan to make a profit just by selling their company later.
A variety of factors prevent entrepreneurs from saving, but there is a large discrepancy between the percentage of small business owners who say they are confident they are setting aside enough for retirement and whose percentage do not save at all. 62 percent say they feel they are saving enough, but 25 percent of small business owners report that they are not saving at all.
In addition, 47 percent of small business owners report that they are saving less than 10 percent of their income. These alarming statistics came from the Spark 401k Small Business Retirement Planning Index, published today by Capital One Advisors 401k Services.
Not only is the amount that entrepreneurs are saving is low, but it is getting even lower. This year, 47 percent of entrepreneurs have saved more than $ 100,000, compared to 59 percent in 2013.
Still, most small business owners who feel secure in their level of savings stay with the general population: The 2017 Retirement Confidence Survey found that 60 percent of American employees feel confident they will be able to get out in comfortable pension. But that has dropped from 64 percent last year. Meanwhile, three in ten employees say these plans are stressful.
Those who have retirement plans report that they feel financially secure for the future. 86 percent of small business owners who have these plans say they are confident they are saving enough, compared to 62 percent, according to Spark 401k. And when it comes to employees, two-thirds of those who do not have a retirement plan report having less than $ 1,000 in savings and investment, compared to just 9 percent of those with a retirement plan, Retirement Confidence found out this year.