The foodservice industry is rich with opportunities for creative expression and relationship building, and restaurant owners know how rewarding it can be. But like so many others running small businesses, restaurant owners can also face tough challenges. With high rates of staff turnover and heavy competition, it can be difficult for owners to stay afloat. On top of that, employee benefits, such as retirement savings plans, may seem out of reach. In fact, only 47 percent of private industry workers at establishments with fewer than 50 employees have access to workplace retirement savings plans, according to the U.S. Bureau of Labor Statistics.
myRA, a new retirement savings account developed by the U.S. Department of the Treasury, is a safe, simple, and affordable solution for small business owners who aren’t in positions to offer retirement savings plans. With myRA, employers don’t administer accounts or match employee contributions; instead, they simply provide information about the program and encourage employees to save. And while employers can set up direct deposit payments for participating employees, myRA also offers the option to fund accounts from personal checking or savings accounts or federal tax refunds.
Recent data shows that some workers are disproportionately affected by lack of access to retirement savings plans. According to the U.S. Bureau of Labor and Statistics, employer-provided retirement benefits were available to only 33 percent of private industry workers making less than $9.37 per hour.
As most savvy business owners know, an important component of any successful business — especially one built on hospitality — is finding good employees and keeping them. myRA allows business owners to support their employees by helping them start saving, which helps contribute to their future financial stability and overall wellbeing.
Restaurant workers often face other barriers when it comes to saving for retirement. They may rely on unpredictable wages that change based on season, shift and even the whim of customer tips, which can make it especially hard to commit to a consistent savings habit. Furthermore, they may be part-time and/or seasonal workers, or they may work multiple part-time jobs.
myRA gives workers the option to save at any level that suits their income and financial situation, however unpredictable they may be. In fact:
• They can save as much or as little as fits their budget, from a few dollars per paycheck to a lump sum, as long as it is within Roth IRA limits and under the account maximum of $15,000.
• In addition to the ease and flexibility of making contributions, account holders can withdraw the money they’ve contributed at any time, without penalty, giving them an extra dose of confidence to weather life’s unexpected challenges.
• Plus, accounts are portable, meaning that seasonal or part-time workers can kick-start their savings habits and then bring the account with them as they move on to their next jobs.
Restaurant owners have a lot on their plates. In addition to providing patrons with experiences that keep them coming back, they have to do what they can to support their employees. Fortunately, myRA is one simple way to help workers save today and prepare for their futures.
Visit myRA.gov for more information and to access free materials to share with your employees.
Richard Ludlow is myRA executive director at the U.S. Treasury.