Millennial Small Biz Owners More Open to Offering Retirement Plans than Gen X
Millennial small business owners take the lead in prioritizing retirement benefits compared to other generations, according to new research out today from Capital Group.
“With the right advice and support, business owners can discover how the benefits [of offering a retirement plan] outweigh the perceived obstacles.”
Renee Grimm, Capital Group
More than three-quarters (77%) of Millennials (median age 37) report believing that offering a retirement plan is “essential” to their small business, while Gen X small business owners (median age 53) are significantly less likely to believe in the importance of offering a retirement plan—and the least ready to offer one (only 57% say they are ready now). This despite having spent more time in the workforce and being closer to retirement age themselves.
The youngest group, Gen Z owners (median age 21), were predictably less likely to see employer-sponsored plans as important (67%).
“Hearing directly from small business owners of all ages and understanding their challenges is critical for us to deliver on our commitment to savers across America,” said Renee Grimm, Senior Vice President, Retirement Plans, Capital Group. “For the thousands of small businesses who make up such a large proportion of U.S. companies, offering a retirement plan doesn’t have to be a ‘someday’ item. With the right advice and support, business owners can discover how the benefits outweigh the perceived obstacles.”
Capital Group’s Small Business America report reflects the views of 1,000 small business owners surveyed in April 2025 regarding their outlook and readiness to offer retirement benefits.
Top perceived obstacles to offering a plan
The top obstacles to offering a retirement plan are perceived cost (36%), a belief that their business is too small (34%) and lack of administrative resources (32%).
Among those not currently offering a plan, 61% say they would turn to a financial advisor first for guidance—with men significantly more likely than women to do so (76% vs. 58%)—but nearly a third (31%) of owners overall report not having a financial advisor at all.
Across age groups, the report also found a gender gap emerged among small business owners not currently offering a retirement plan: only 51% of women felt their business was ready to offer one, compared to 64% of men. Women also reported being more interested in learning about benefits of starting a plan afforded by SECURE 2.0 provisions (70% of women compared to 59% of men). And more women are “very likely” to start a plan based on tax credits (53% to 43%).
8 in 10 who offer plans happy with decision
Capital Group’s survey found that small business owners who do offer a retirement plan report fewer concerns across nearly all business stressors—from rising labor costs to rapidly changing technology to cash flow issues.
Eighty-one percent of business owners who decided to offer a plan say they are glad they did, with many citing better employee retention (63%), stronger morale (56%) and increased company loyalty (44%) as the biggest benefits.
“We can make a meaningful impact in providing access to retirement for more people if we can help educate owners on the benefits for themselves and their employees of saving for retirement,” said Grimm. “While correlation is not causation, we can observe that business owners who offer their employees a retirement plan seem to have greater peace of mind about the state of their business. The data suggests that a retirement plan may also help alleviate some business owners’ concerns, including things like attracting and retaining talent.”
SEE ALSO:
• Small Business Owners Rely on Financial Guidance
• LeafHouse, Capital Group Team Up for Customized TDF Solution
• Capital Group Enhances SMB Retirement Plan Service Capabilities
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
