Health benefits as the enemy of retirement benefits?

Small businesses have low rates of employer-sponsored retirement plans. Is health care coverage the culprit? From a Wall Street Journal article on retirement benefits:

Many business owners say they can’t afford to fund both retirement and health benefits, and that their employees prefer health coverage.

Mike Sincavage owns an excavation company in Blakeslee, Pa., that employs five workers. Health-insurance costs jumped 27% this year, he said, not leaving much money to offer other benefits. Having health coverage is important to his workers, he said, as well as being able to maximize take-home pay.

January 4, 2006

One thought on “Health benefits as the enemy of retirement benefits?”

  1. Funding is part of the issue, but the other larger part is that Congress has now made the two prongs of a strong retirement competitive with one another. With the introduction of HSAs, I believe you’ll see a trend where IRAs are passed over in favor of HSA accounts, because health costs now and in the future are of more immediate and pressing importance to people. The ‘discretionary savings dollars’ will be put where the consumer sees the most bang for their “today” buck, and HSAs will prevail, much to the detriment of retirement benefits.

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