February 4, 2023

Market and Financial News

Market and Financial News Aggregator

Behind on retirement saving? A bad market can be a good time to invest

2 min read

Small business owners are among the Americans most likely to fall behind on saving for retirement. Investing back into a business is more often a priority for entrepreneurs with any excess cash than investing in a long-term tax-deferred retirement plan. Covid didn’t help.

Amid the pandemic, scores of America’s small business owners stopped or cut back on their retirement savings, according to investment professionals and retirement experts, squeezed by rising labor and raw material costs, or in the worst-case scenario, facing business closures.

To be sure, the pandemic didn’t take a toll on every small business in terms of retirement planning. Thirty-seven percent of small business owners say they aren’t confident that they are saving enough for retirement, according to a March survey by ShareBuilder 401k of 500 small businesses. But that’s down somewhat from the 44% who said two years earlier they weren’t confident in their retirement savings ability.

Some data shows that, at least on the margins, small business owner savings rates mirrored the bump across all Americans during the pandemic. In 2019, the average monthly amount that active participants contributed to their 401(k) plan with Guideline, a retirement platform for small businesses, was $646. That increased to $783 in 2021, according to the company. For its part, Vanguard saw participation rates among small businesses rise to 73% in 2020 from 72% a year earlier, and deferral rates — the portion of an employee’s wages contributed to retirement — increase to 7.3% in 2020, up from 7.1% in 2019.

But these outcomes generally don’t reflect the experiences of many of the country’s smallest businesses — including those in particularly hard-hit industries. Many of these businesses have fallen further behind in their retirement savings goals in recent years for a variety of reasons and are in need of a kick start, according to financial professionals. Coupled with the fact that many owners were never saving…

2022-06-05 10:00:01

All news and articles are copyrighted to the respective authors and/or News Broadcasters. VIXC.Com is an independent Online News Aggregator

Read more from original source here…

Leave a Reply

Copyright © All rights reserved. | Newsphere by AF themes.