Fidelity Investments Small Business Retirement Savings Analysis indicates a continuing improvement in the economic optimism of small business owners. Using aggregated data from its more than 200,000 small business retirement accounts, Fidelity says the average plan balance increased 4 percent—and the average contributions to such plans increased 18 percent.

And compared to 2008 levels, when balances were at their lowest, average savings have jumped an impressive 88 percent, a positive indication that small business owners are feeling confident enough about their present financial situation to contemplate saving for a future in retirement.

Since small business owner attitudes are often good predictors of economic growth, these retirement savings numbers are good news, and in line with other indicators of improved optimism, according to Fidelity’s Ken Hevert. The data also suggests growing optimism is shared by both employers and employees alike, with contributions to both Self-Employed 401(k)s (which are offered to business owners) and SIMPLE IRAs (offered to employees) steadily increasing for five consecutive years.

“This is encouraging, because our research has consistently shown too many Americans are unprepared to live comfortably in retirement,” said Hevert. “While many small business owners count on the sale of their business as a big part of their retirement plan, if the recent past is any indication, it’s important to have options. Selecting a retirement savings plan that is easy to administer and low-cost is critical—it can help maximize retirement savings, retain valuable employees and provide key tax deductions.”

Among the key findings of the savings behaviors of small business accounts from the beginning of 2008 to the end of 2013:

Contributions Continue to Grow

The average contribution to these retirement savings accounts has increased across the board since 2008, with those using Self-Employed 401(k)s experiencing the largest increase of 21 percent to $21,661. Employer contributions to SEP-IRAs increased 17 percent from 2008, reaching $13,814 at the end of 2013. Average contributions to SIMPLE-IRAs increased the least, rising 7 percent to $6,162.

Average Balances Are on the Rise

The average balance of Self-Employed 401(k) plans rose from $75,275 in 2008 to $137,447 in 2013—increasing 83 percent over five years—signaling a strong rebound for small business owners who are using retirement plans for savings purposes. SEP IRA and SIMPLE IRA balances also increased by 92 percent to $84,410 and 100.8 percent to $36,235, respectively.

Related Articles

The 150-Year History of the Term ‘Small Business’

Until the end of the 19th century, there were few big businesses so the history of the term “small business” is less than 150 years. Today, no other phrase comes close to describing companies up to 500 employees.