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Financial Education Eighty-one
percent of those receiving employer-provided retirement information
have money earmarked for retirement; of people who have not received
employer-provided retirement information, only 67 percent have money
earmarked. "It
is becoming increasingly clear that individuals are seeking educational
material that helps them with their saving and investing decisions and
that such material does influence the decisions they make."
A survey
of benefit specialists across the country identifies the specialists'
top five benefit priorities for 2000: 1) To
keep health and welfare costs under control 2)To
evaluate, implement and expand the use of Internet/Intranet applications
3)To
provide financial/retirement planning tools and information.
According
to Virginia Tech research into participation in workplace financial
education, employers not only seek to grow 401(k) plan participation
and increase contribution levels as a percentage of salary, they want
to comply with the regulations defined under Section 404(c) of ERISA
(the Employee Retirement Income Security Act) – to avoid potential
liability for any losses by a plan – and improve employee moral.
A report
issued by the Society for Human Resource Management, headquartered in
Alexandria, Virginia, concluded that 44 percent of employers with over
5,000 employees answered on the survey that they offered financial planning
to employees.
"Sixty-eight
percent of respondents said they were taught about saving and budgeting
by their parents, and 99 percent of respondents who had children under
the age of 18 teach, or plan to teach, their children how to save, budget
and manage money."
Retirement Savings and Knowledge Sixty-seven
percent of workers offered a 401(k) or similar retirement saving plan
at work chose to contribute to the plan. Of those, however, only 65
percent know the maximum amount that they are allowed to contribute,
and of these, less than one-half (48 percent) contribute the maximum.
Only 27
percent of Americans have any idea of what they will need to accumulate
to retire when and how they want. Only 36
percent of current workers have tried to determine how much they need
to save by retirement to fund a confortable retirement. Out of the 36
percent of current workers who had done the calculation, 24 percent
cannot give a figure when asked. Only 40
percent of workers think they have a retirement plan to meet their needs.
In 1998,
only 40 percent of working Americans have calculated how much they will
need to save for retirement.
The average
baby boomer is saving only $2,509 annually.
"A
recent Gallup poll of 30-to-49 year olds illustrates the impact of the
relentless drumbeat: 60 percent say they don't earn enough money to
save for retirement; 74 percent worry about not having enough money
to live comfortably in in retirement; 81 percent agree with the statement,
'there always seems to be something else to spend your money on rather
than savin g it for the future.' "
"Forty-nine
percent of respondents said the amount of their consumer debt (excluding
their mortgage) exceeds their savings. Forty percent of respondents
said they had no emergency funds in the event of economic difficulty
such as disability or loss of job."
"The
survey also uncovered several interesting trends: an increased interest
in IRAs, a slight decrease in the percentage of people who said they
save and a decrease in how knowledgeable 401(k) participants feel about
selecting their investment options." |
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