Saving for retirement as a small business owner is hard. The extra cash is immediately invested in the business, and retirement plans are always for tomorrow. According to the Employee Benefit Research Institute (EBRI), many Americans are falling short when it comes to retirement. In 2015, 28% of Americans had less than $1,000 dollars saved, and a whooping 64% had less than $50,000. While retirement plans are not always available through their employers, many workers should be happy to know that the ease to open a retirement account through other mediums is fairly easy and pain free.
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Some Small Businesses Restore Group Health Coverage
Backtracking reflects tighter labor market and pricier individual plans.
Some small companies that dropped group health insurance for their employees are reversing course, driven by a tightening labor market and rising costs and fewer choices for individual coverage.
Laura Cottrell, owner of a seven-person home-furnishings and home-improvement products business in St. Louis, dropped group coverage in 2014, not only because of the cost but also the complexities of picking the right plan within a short deadline. Instead, she gave her employees a raise that they could use to buy their own health plans, sparing her from choosing for them.
Now Ms. Cottrell is looking at adding health benefits to make a cabinetry business she launched this year more attractive to potential employees. If she makes the change, she says she would offer coverage to employees of both of her businesses.
“People are looking for health care,” said Ms. Cottrell, who said she was recently turned down by one job candidate because she doesn’t offer health benefits. Adding to her pain: UnitedHealth Group Inc., her personal carrier, won’t offer individual coverage in Missouri next year.
When can you quit your day job when starting a small business?
Q: When you’re starting a small business, when is the right time to quit your day job — financially speaking? If you’re starting your own business and you plan to take out a loan, should you factor in your own living expenses?
Anonymous business owner.
A: When you are starting a business, your personal finances are inseparable from the business. So you need to factor your living expenses into all your financial calculations.
An exercise I use with my students is to have them calculate their “runway.” It is a simple calculation to determine how long they have before they and the business run out of money. How long before the business has to take off. How do you calculate your runway?
California set to join states offering retirement plans
Workers without a workplace option can now open accounts.
More than half of American workers — roughly 55 million — don’t have access to a retirement savings plan on the job.
This week California lawmakers are expected to vote on a bill that would enroll employees who are not covered by an employer-sponsored retirement plan at work into a state-run one.
Lawmakers in California, the nation’s most populous state, are not alone. Since 2012, more than half of state legislatures have considered bills that would create government-run retirement plans for private-sector workers. (See map below.)
