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Financial Literacy Education to Stimulate Retirement Savings

Financial literacy education

Financial Literacy Education to Stimulate Retirement Savings

Financial literacy education needs to step out of the darkness and be recognized.  When handled properly financial literacy education can help to improve the savings habits of America’s workers, thereby setting them on a track for a less stressful retirement. Make no mistake about it, financial literacy education and financial literacy awareness programs help employees to understand the basic terms of saving and investing and will also put them in a place to comprehend the basic financial concepts, so they can manage their money better.

Today workers and non-workers alike are driven by instant gratification. As they attempt to enjoy the latest technology, fashion, trends and restaurants many fail to understand what those habits are costing them.  Sure, it tastes and looks good; But how does lifestyle impact one’s ability to retire at Normal Retirement Age? What they consume today does really very-little to benefit them 10 & 20 years hence.

While attempting to keep up with the neighbors via social media or neighborhood pressure, there may be no progress being made towards retiring debt or saving for the future. In most cases, a debt-driven lifestyle is not a recipe for building wealth. However, in many cases, a debt-driven society cannot build wealth – Not for today, and not for retirement. Employers can contribute a lot to the benefit of a financially illiterate workforce by stepping-up and establishing a financial literacy education program within their organization. It is a monumental task to convince employees and workers to change their spendthrift ways and set aside savings for a future that they are unable to envision on their own.  Financial literacy education can wind up being a significant game-changer.  Financial literacy education can have that long-lasting impact on the financial well-being of employees and workers over time.

A large number of U.S. employees may be facing serious money trouble. Most of your employees would benefit greatly by your assistance with financial literacy education.  Following are some eye-opening statistics from a CareerBuilder study referenced in a blog post on financial literacy awareness from personal finance guru Dave Ramsey:

  • Nearly four out of five American workers live paycheck to paycheck;
  • Over a quarter do not save any money from month to month; and
  • Almost 75% are in some sort of debt (and unfortunately many assume they always will be in debt.)

What is an employer to do to help employees fine-tune their financial literacy education and awareness while working and in retirement? An effective 401k financial literacy education program is a good place to start. Even if an organization doesn’t have a formal program in place or doesn’t have the budget to implement one right now, there are ways you can help boost financial literacy education in the workplace.

Small steps can make a monumental difference when it comes to helping employees to prudently handle their money. Where can employees turn to “keep earning” when they have the urge?  They can try the conversation on cutting-edge benefits such as student loan repayment programs, or building an emergency fund via companion “sidecar savings accounts” paired with the retirement plan.

If you spend any amount of time listening to Dave Ramsey you will hear stories of people who achieved success by starting small. It can be accomplished. It all starts with financial literacy education.  401k financial literacy education programs are an effective way to help employees to eliminate debt and build wealth for their future.

Steff Chalk

Steff Chalk

Managing Editor at 401kTV
Steff C. Chalk is Executive Director of The Retirement Advisor University, a collaboration with UCLA Anderson School of Management Executive Education. Steff also serves as Executive Director of The Plan Sponsor University and is current faculty of The Retirement Adviser University.
Steff Chalk
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