The Entrepreneur Retirement Crisis: 1 in 5 Small Business Owners Have No Savings

America's small businesses power our economy, but a concerning trend is emerging: the entrepreneurs behind these businesses are facing a retirement crisis.

According to the newly released 2025 WealthRabbit Small Business Retirement Report, which surveyed over 800 U.S. business owners with 100 or fewer employees, the retirement outlook for America's entrepreneurs is increasingly bleak.

The Alarming Statistics

The findings paint a troubling picture:

• Nearly 1 in 5 business owners have no retirement savings at all
• The majority have saved less than $50,000 – even those approaching retirement age
• Women entrepreneurs are twice as likely to report having no savings compared to men – a gender gap that persists across all age groups

Perhaps most concerning is the savings comparison between entrepreneurs and their corporate counterparts. The most common amount saved by small business owners aged 45-55 is just $50,000. Financial experts recommend $1.2 million in retirement savings for someone earning $120,000 annually at this stage. Meanwhile, even the average corporate employee in this age range has a 401(k) balance between $152,100 and $199,900, according to 2024 data from Fidelity.

A System Not Designed for Entrepreneurs

"We're watching a new kind of financial inequality unfold, one driven not by employment status, but by who the retirement system was designed to serve," explains WealthRabbit co-founder Jason Ackerman, CPA, CFP, CGMA. "If you're self-employed or work for a small business, the traditional system isn't just hard to use, it may not even be available to you."

This disparity affects millions of Americans. With the U.S. Small Business Administration estimating that 98% of all U.S. businesses have 100 or fewer employees, approximately 55 million Americans working in small businesses lack access to employer-sponsored retirement plans.

The Barriers to Retirement Planning

When asked why they don't offer retirement plans, small business owners consistently cited two main barriers:

1. Cost – Traditional 401(k) plans often come with high setup and administrative fees
2. Time commitment – The complexity and paperwork associated with establishing retirement plans

Only 34% of small businesses currently offer any retirement plan to their staff, despite many owners acknowledging the importance of such benefits for talent attraction and retention.

Bridging the Retirement Gap

Founded in 2024 by financial advisors Jason Ackerman and Adam Ackerman, WealthRabbit was created specifically to address this growing crisis. The platform offers digital-first SIMPLE IRAs designed specifically for businesses with under 100 employees, providing a more accessible alternative to traditional 401(k)s.

"We built WealthRabbit for the 55 million Americans who've been left out of the retirement conversation," says co-founder Adam Ackerman, CFP. "It's time for a solution that meets people where they are."

The platform allows business owners to offer retirement benefits starting at just $29/month plus $4 per employee – a fraction of the cost of traditional retirement plans that often require thousands in setup fees alone.

Looking Ahead

As inflation and economic uncertainty continue to rank as top concerns for small business owners, the need for accessible retirement solutions becomes even more critical. The traditional retirement system was built for a different era – one dominated by large employers with dedicated HR departments and generous benefits packages.

Today's economy, driven increasingly by small businesses, freelancers, and the self-employed, requires retirement solutions that reflect this new reality. The significant gaps revealed in the WealthRabbit Small Business Retirement Report underscore the urgency of this need.

View the complete 2025 WealthRabbit Small Business Retirement Report findings, below.

WealthRabbit is a digital retirement platform offering Simple IRAs for small businesses with under 100 employees. Founded by financial advisors Jason and Adam Ackerman, WealthRabbit is on a mission to close America's small business retirement gap through affordable, accessible retirement solutions.