According to a survey from Fidelity Investments, when asked a series of
basic questions about their retirement plan features and benefits, small-business
owner respondents on average only answered 66% correctly. For example:
• Half who use a Self-Employed 401(k) did not know the
maximum annual employer contribution allowed for this plan;
• Nearly two-thirds (60%) with SIMPLE-IRAs were not aware
that employer tax filing is not required; and
• More than half (55%) using a SEP IRA did not know that the
plan is funded solely by employer contributions.
addition to uncovering a knowledge gap among respondents who currently have a
retirement plan, 100 small-business owners who do not have a retirement savings
plan were surveyed.
The top reason (34%) cited for not having a retirement plan is the perception
that it is too expensive.