According to the study, only 15% of employees are confident they are on track to meet their retirement goals, a drop from 18% in Q4 2010 – among the lowest retirement confidence levels Financial Finesse has ever recorded. Two-thirds (66%) of respondents admit to not having used a retirement calculator.
Employees report they know investment basics but aren’t applying that knowledge in a meaningful way to their own financial situation, according to the report. While 77% of employees say they have a general knowledge of stocks, bonds and mutual funds, only 34% are confident their own investments are allocated properly.
The study results indicate that employees and employers recognize the problem and are taking action to solve it. Across the board, employees of virtually all income levels and all age groups (except for those under $60,000 and under age 30) reported that retirement was their top priority, and the number of employees participating in their company-sponsored retirement plan has increased from 83% in 2010 to 91% in Q1 2011.
In addition, more employers are offering retirement education as an ongoing employee benefit and those employees who commit to ongoing retirement education are saving enough to retire comfortably. Financial Finesse pointed out that a recent behavioral change study it conducted found that employees saved on average 11% of their income – over twice the national average – in their 401(k) plans when they had five or more interactions with retirement education programs.A study report can be downloaded from http://goff.im/Q1-2011-Research.