Small businesses are under fire after a recent report, titled “The Retirement Readiness Imperative Report,” aptly demonstrated the sorry state of retirement benefits for employees of these companies. Released in October 2013 by the Transamerica Center for Retirement Studies, the study indicates that if you work for company with less than 100 hundred employees, then your access to retirement benefits is significantly more restricted than if you worked at a larger company.
Most surprising is that close to 30% of the surveyed companies offer no retirement plan at all. This percentage soared to over 90% for companies with less than 10 employees, meaning that these employees are under increased pressure to learn how to save for the future. However, as the study goes on to show, even if you have a plan, the path to financial security requires hard work.
The report’s author, Catherine Collinson, best summarizes the state of the situation, stating, “Workers at small companies need to be even more savvy about their retirement benefits of printer customer support than those at large companies, given the lag of those benefits at small companies.”
The lag that Ms. Collinson refers to is clear in the contents of the report. The benefits offered by small companies are subpar when compared to the standard plans of larger companies. For example, small business benefit plans are less likely to offer automatic enrollment, matching fund programs, and online planning tools. The small plans almost never provide seminars for financial planning. These plans often fail to provide information about distribution options when an employee approaches retirement age.
Managing a small business is not easy and many owners claim that comprehensive retirement plans are too expensive to administer. No matter the reasons, if you work in a small company, then the road to retirement is steep. The time to get serious about retirement planning is now. There is no magic pill to gain wealth. Take the initiative and educate yourself. Your financial future demands it.
Source: Chicago Tribune