According to estimates from AARP’s Public Policy Institute, workers are roughly fifteen times more likely to save for retirement if their employer offers retirement benefits. But as a small business, offering retirement benefits often feels out of reach. Thin margins and tight balance sheets can squeeze your benefits decision to offering either health insurance or retirement, but not both.

Here is the good news: we are in a new era of retirement plans. For the most part, the days of the defined benefit pension plan are over. Employers are no longer expected to shoulder the risk of managing an employee’s retirement fund but employers still play an influential role in helping working Americans prepare for retirement.

Today, technology and financial service innovation have made it possible to access simple, cost-effective retirement options that fit even the smallest firms and the slightest budgets. Here are three reasons to offer your employees a retirement plan.

Labor is in High Demand

Considering low unemployment and high job openings, labor is in high demand. This could make filling your current job openings a challenge and drive up the price of labor, in turn creating an environment where an employee leaves when a competitor across the street offers fifty cents more per hour. Any additional benefits you can offer your team to differentiate yourself from your competitors and attract and retain talent would be a smart use of resources.

Mandated Retirement Plans are Coming

By being proactive in offering a plan to your employees sooner rather than later, you buy yourself peace of mind. A range of new regulations requiring small and medium-sized employers to offer retirement plans to their employees is taking shape at both the state and municipal levels. Rules span from mandating plans for companies with at least five employees to voluntary participation in a state-vetted provider marketplace. Each state is at different stages of implementation, so you’ll want to become familiar with where your state is in the process.

Employee Loyalty is Part of Your Succession Plan

It’s important to take care of the people who take care of your business. But it’s also important to take care of the people who will inherit your business. Steps taken today will help minimize future social security deficiencies and downward mobility for your employees. When you care about their future, they will care about the future of your company. By giving your employees an opportunity to build retirement savings you are giving them reason to stay loyal and committed to your business for the long haul.

As Americans, we face real challenges with financial security and retirement preparedness. As entrepreneurs and business owners, you are inherently leaders, which means that you have the ability and the opportunity to play an important role in America’s retirement story.

Financial technology innovation has paved the way for companies like yours to offer quality, affordable retirement benefits for your employees. Thanks to these innovations, it is easier than ever to get your employees on track for a brighter future. The bottom line is without a retirement benefit offered through their job, they are being left behind. As employers, it is up to you to lead the way.

This article was written by Tyler Phillips of Finhabits Advisors. If you’re looking for a simple, low-cost retirement benefits for your employees, click here or call 800-492-1175 to learn more about Finhabits at Work.


This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Finhabits advisors does not provide legal or tax advice and if you have questions regarding your personal circumstances, you should consult a tax or legal professional.