Many small business owners are not saving enough for their retirement, but I'm not so sure the reasons given are entirely accurate. A survey last year from online community provider Manta found that a whopping one-third (34 percent) said they don't have a retirement savings plan. Why? The lion's share of the 1,960 respondents said it was because they're just not making enough money. Others say they used savings to fund their businesses and didn’t have much left over to put toward retirement. More concerning, almost one in five said they plan on using the expected proceeds from selling their business to retire on. I'm sure the small business owners who responded to the survey truly think these are the reasons why they're not putting money away for retirement. But I think there's something else going on. That something else can be summarized in just one word: liquidity. My firm serves more than 600 small and medium sized businesses, and I meet thousands of business owners throughout the year through the writing and speaking I do. Here's what I see: in 2018, most everybody is making money. Sure, it's competitive and of course there are challenges. But the economy has been growing, demand is up, and business owners are busy. There are profits. There is capital. There is an increase in cash flow. This is not 2009 or 2010. But ... 2009 and 2010 still loom in many of our minds. Startups and tech entrepreneurs aside, most of the country's 30 million small business owners are running established companies and suffered through the last recession. They remember how sales took a dive, financing dried up, cash drained, and drastic steps needed to be taken just to stay afloat. Those were terrible times and they're ingrained in our memories. The big lesson that many of us took from that experience was this: make sure you have cash reserves because you never know when the next big one is coming. In other words: be liquid. But this “being liquid” frame of mind sometimes goes too far. I come across many business owners who keep an excessive amount of cash in checking or low-interest savings and money market accounts. I get it. I sometimes do, too. This is why we’re not saving as much as we should for retirement. Unfortunately, today's retirements plans take away our ability to be liquid. When you put money away in traditionally-defined contribution plans like a 401(K), a Roth savings plan, or even an IRA, you're tying it up for the future. Withdrawals are heavily penalized. Loans are limited. It’s tough to get at that money. While any financial planner can list a number of benefits—both tax and otherwise—for taking advantage of these types of retirement plans, they can't argue the fact that putting money into these plans removes that cash from your business. This is the cash that may be needed if another downturn occurs. So what's the answer? It's being smart about liquidity. Keeping cash in liquid accounts that normally earn low amounts of interest isn't smart. Not taking advantage of the pre-tax benefits you get by contributing money to an approved retirement plan means you're paying too much in taxes to the government. That’s not smart either. Avoiding a 401(K) plan at your company means you're not offering a very valuable and popular benefit to your employees, particularly in a time when finding good people is challenging and firms that do offer these types of benefits are taking those good people away from you. You know that your employees are your biggest asset and when you hinder your chances of attracting the best people, you’re hurting your business. Running a business means making thousands of decisions where you weigh the risks and rewards before moving forward. Of course there's a liquidity risk if you put your money into a retirement account. I get that. But aren't the rewards greater? I believe they are. Being aware of your liquidity is prudent and rational. But over-emphasizing liquidity in lieu of reasonably potential profits and growth is just bad business.