Retirement is an important investment that unfortunately not many people make in America. In fact 38% don’t actively save for retirement at, 45% of Americans have saved nothing for retirement, including 40% of Baby Boomers and the average net worth (assets minus debts) of a 55-64 year old is $45,447 1 . Even though it is easy to say many employees have poor skills in managing their financial future some of the fault can be put on their employers who may not offer saving plans for the future good news is that small business employers are starting to catch up despite the fact that 14% of small businesses offer 401(k) plans to employees, experts say such plans are getting increasingly easier to offer.

Tyler King, CEO of a small tech startup has recognized that some of his employees are starting families or are recent college graduates who in his mind are the ideal group of people who should be concerned about saving up for their future which is why he made it his objective to help them to do so. “As a small, growing business, setting up a 401(k) was a worthwhile and affordable investment,” he says “even if someone doesn’t use the 401(k), it’s nice knowing that it’s still an option for them.”

Though the number of 401(k) plans held by small businesses is low experts believe that it is now getting easier for businesses to offer them and helpful in the competitive sense as they are being used to recruit potential employees. Over the past 10 years we have seen changes in legislation that further help small businesses provide 401(k) plans more available with some state legislators trying to make retirement plans a state law for small businesses. “These changes make it easier for even the smallest businesses to offer plans that rival even their biggest competitors,” says Wayne Bland a retirement plan consultant for Metro Retirement Advisors in Charlotte, N.C. Pressure is being put on many businesses to offer better investment choices and lower fees which has resulted in low cost high quality custom retirement plans.

There are still challenges that face top quality 401(k) for employees one being the stringent non- discrimination test that prevents disproportionate compensation to employees. “Meeting these tests can sometimes be onerous, and while a ‘safe harbor’ option does exist that can exempt small businesses from the testing, the safe harbor plans can often be expensive for employers to sponsor.” says Evan Powers a senior financial planner at He believes that some issues make providing 401(k)’s impractical to provide for some employees and that Roth IRA’s would make better alternatives.

Despite this with the tools being provided nowadays and the growing recognition of importance of setting up retirement plans early small business owners and their employees alike are starting to invest more of their time and effort for securing a better future for themselves. However this does not change the fact that many people just don’t invest enough time and effort on planning on their retirement and that is something that has to change. Being a little or totally unprepared for your future is not where you want to be as many people already at retirement age are working part time jobs or are totally reliant on their families even with a supplemental income. Keep in mind that social security is not a retirement plan but an alternate source of income to provide assistance along with what you have already saved. Savings accounts, IRA, 401(k)’s is the best way to be financially ready for your future and the sooner you start the more you save and the better it is for you in the long run.


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