Retirement plan participants are in the dark on a wide range of financial topics—whether it is how compounding works, the consequences of taking out a loan from a 401(k), how Social Security benefits are taxed, or student loan debt.
These were the key findings from an online survey of 10,500 retirement plan participants by OneAmerica. At the bottom of the list of understanding for financial topics stands the Savers Tax Credit, which only 10% of respondents say they understand, followed by taxation on Social Security benefits (13%) and advanced investing (14%).
“Even people who are actively engaged with their retirement planning are admittedly in dire need of education about financial topics,” says Marsha Whitehead, vice president of marketing for retirement services for the companies of OneAmerica. “The survey data tells us that even as we’ve made retirement readiness easier to understand through the availability of online calculators and helpful videos on our One Day is Today website, we can do a better job of making participants more knowledgeable. Plan sponsors need to understand and act on that.”
OneAmerica says that by providing holistic financial wellness education, sponsors can help people take control of their financial lives—such as student loans, credit card debt and budgeting—to put them in a better position to save for retirement.