Self-employed workers lag in retirement savings

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Posted: Wednesday, December 4, 2013 12:00 am

The smallest of American small businesses — the self-employed — may enjoy calling themselves “boss,” but the majority are generally unprepared for retirement, according to a">recent TD Ameritrade study.

Almost 70 percent of more than 2,000 self-employed survey respondents indicated they either don’t regularly put aside money for retirement or they don’t save at all. By comparison, only 12 percent of traditionally employed Americans said they don’t allocate any money to a retirement fund.

“When you’re self-employed the temptation is to think that the business will grow enough that you won’t need to save today,” said Lule Demmissie, managing director of retirement at TD Ameritrade. “The self-employed don’t have an HR department taking care of the setup and logistics of a retirement plan, and some of these plans have special considerations, so the hurdle is a little higher for them.”

The survey found younger entrepreneurs were even less likely to build a nest egg than their older counterparts: 29 percent of Generation X respondents and 32 percent of Generation Y respondents indicated they weren’t currently saving for retirement.

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