small business owners were found to have a higher appreciation of the
importance of saving for retirement and the need for workplace retirement
benefits compared to their older peers, according to a new survey.
Nationwide’s 2018 Annual Business
Owners Study reveals that Millennial business owners are nearly
twice as likely as the average owner to offer retirement benefits to their
employees in the future — 69% versus 36%.
Millennials are supposedly more likely to feel it is their responsibility to
help their employees save for retirement (57%) versus less than a third (31%)
of Boomers and 44% of Gen X business owners. The generation also recognizes the
importance of a workplace saving plan for their own retirement savings, with
53% of Millennials saying so, compared to only 39% for Boomers.
business climate may have something to do with the findings. Most business
owners (61%) report that they are expecting better sales this year, including
64% of Millennial business owners. And considering the tightening labor market,
51% of Millennial business owners agree that offering a retirement plan helps
them with recruiting and retention, compared to 44% and 31% for Gen X and
grew up during the Great Recession a decade ago, which significantly impacted
how the generation spends, saves and manages their money and businesses,” notes
John Carter, president of retirement plans for Nationwide. “Now, they are
planning ahead and taking actions that could help them and their employees
achieve financial security in retirement.”
Millennials reportedly are also seeking out retirement planning advice.
According to the findings, 50% of Millennials employ the use of a retirement
planning advisor, compared to only 4 in 10 small business owners overall.
And of those
who do work with a retirement planning advisor, only 38% report conversations
happening once a month or more frequently. Most conversations take place “every
couple of months” (39%) or once a year (22%).
Tax Reform’s Impact
the impact of tax reform also vary across generations. Overall, nearly half
(49%) of all business owners will not take any action with their retirement
benefits due to tax reform. However, only 16% of Millennial business owners
said that they planned to take no action, compared to 67% of Boomers.
nearly a third (32%) of Millennial business owners said they will increase
retirement contributions due to tax reform, compared to just 18% for all
business owners. What’s more, 25% of Millennial business owners who plan to
offer retirement benefits say enactment of tax reform made it possible for them
to do so, compared to just 19% of all business owners.
As to general
attitudes about retirement, small business owners seem to be in general
agreement that America’s workers are facing a retirement readiness crisis.
While this is an often debated topic within policy circles, these survey
results show that 67% of small business owners overall agree that there is a
crisis. Interestingly, the level of agreement goes up with generational age,
such that 62% of Millennials, 65% of Gen X and 71% of Baby Boomers agree.
Yet, when asked
what benefits they offer, only 27% of respondents reported that they offer
retirement benefits; overall, 36% of respondents said they do not offer
benefits of any kind.
Intelligence conducted the online survey on behalf of Nationwide during the
period April 9-20, 2018, among 1,000 U.S. business owners. Business owners are
defined as having between 1-499 employees, being 18 years or older and
self-reporting as either a sole or partial owner of their business.
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