Newsroom Capital Group research reveals generational divide among small business owners when it comes to retirement plan readiness

Millennial business owners lead in prioritizing retirement benefits compared to other generations


Offering retirement plans is linked to greater peace of mind and business stability


LOS ANGELES, November 10, 2025 — A new study from Capital Group, one of the world’s largest and most experienced active investment managers, and a leading provider of retirement plans to small businesses, reveals a generational divide in how small business owners think about retirement plans. While most understand the value of offering retirement benefits, their openness to offering employees a plan varies by age and experience.


“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. Overall, business optimism is high among 71% of owners, yet readiness to offer retirement plans varies by generation:
 

  • Millennials (median age 37) stand out as the most open, with more than three-quarters (77%) believing that offering a retirement plan is ‘essential’ to their business.
  • The youngest group, Gen Z owners (median age 21), are less likely to see employer-sponsored plans as important (67%).
  • Gen X small business owners (median age 53) are also 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), despite having spent more time in the workforce and being closer to retirement age themselves.
  • Across age groups, 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.

Persistent barriers vs. proven benefits


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.


However, 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.”

About Capital Group


Capital Group, home of American Funds, has been singularly focused on delivering superior results for long-term investors using high-conviction portfolios, rigorous research, and individual accountability since 1931.


As of June 30, 2025, Capital Group manages more than $3 trillion in equity and fixed income assets for millions of individuals and institutional investors around the world. Capital Group manages equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.


For more information, visit capitalgroup.com.

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.


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Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.


This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.


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