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Let’s pretend for a minute that the doctor looks you over, takes some blood, does some X-rays, and runs some tests. A few days later, you get a call from the nurse to come back to the doctor’s office. He tells you that you have a disorder you’ve never heard of. Then he leaves the room for a second.
While he’s gone, what do you do?
Yep—you grab your smartphone and google that disorder so you can learn more about it.
The point? Education is important.
And it’s especially true when it comes to your retirement. Having the right education and information could make a huge difference in your retirement savings.
Retirement: What the Numbers Say
Recently, my team used a third-party research panel to survey random adults to understand the state of retirement in America. We wanted to know how much people are saving, how they feel about retirement, which age group is most prepared, and much more.And we’re learning some fascinating things, including the importance of retirement education.
More than 60% of Americans currently contribute to a company 401(k) program.
The study shows that the workplace is a huge piece of the retirement puzzle. More than 60% of Americans currently contribute to a company 401(k) program. That’s the good news. The bad news is that 40% of the workforce says their company doesn’t provide retirement education for its employees. And of those people, almost half (47%) say anxiety is their top emotion when they think about retirement. That’s not okay! Here’s why:
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- Forty-seven percent of people who’ve saved $250,000 or more for retirement list their employer as a main source of retirement education.
- Compared to those who feel least confident, employees who are most confident about their retirement are twice as likely to have employer-provided retirement education.
- Seven out of 10 workers who don’t have any money saved for retirement say they don’t have access to any retirement education from their employer.
Do you see the connection? People who have access to employer-retirement education are better prepared for retirement than those who don’t have that information. Ignorance isn’t bliss!
People who have access to employer-retirement education are better prepared for retirement than those who don’t have that information.
Make sure you take advantage of any financial wellness education offered by your employer. And don’t be afraid to ask questions. I’d rather you feel a little anxiety now than a lot of anxiety when you retire! If you’re interested in bringing a financial wellness program to your organization, visit SmartDollar.com to learn more.
Be Careful About Your Information Sources
If your employer doesn’t offer retirement education, then it’s up to you to learn on your own. But be careful about where you get your information. Not all sources are created equal. Here’s what the study showed:
- Workers who listed their employers as their first or second source of retirement education have more money saved for retirement than those who listed parents or family members as their top source.
- Forty-seven percent of Americans with zero retirement savings list family/friends as their main source of retirement education.
- The most common sources American workers rely on for retirement education are their employers (35%) and their parents (35%), followed closely by family/friends (32%).
Your family and friends may know what’s worked for them (or what hasn’t), but they don’t know all of your options when it comes to saving for retirement. That’s why you need other, more reliable sources of information.
How You Can Learn More About Retirement Education
If you want to know more about your retirement planning options, there are lots of reliable resources. It’s up to you to take advantage of them. Here are just a few:
1. Ask your HR contact.
You may think your company doesn’t offer any retirement education, but you may just be unaware of it. Before you take any other steps, ask your contact in your Human Resources area about any retirement education or financial wellness information your employer offers. This could be things like:
- On-site group classes or seminars at work
- Online education/webinars
- Access to an online budgeting tool
- Visits from a 401(k) plan provider
- One-on-one financial coaching
2. Do some solo research.You can find hundreds of websites that offer information about retirement, from how to open an IRA to calculating your investment’s potential growth. This may be especially helpful if you’re just starting out and want to know the basics. Again, be careful about your sources. Stick with banks, mutual fund providers and other reputable resources.
3. Talk to a professional.
The best information comes from the experts. They can help you open retirement accounts, choose the right mutual funds for your age and risk tolerance, and answer all of your questions.
If you’re new to the world of retirement education and planning, write down a list of things you want to know:
- What’s the difference between a 401(k) and an IRA? What about traditional IRA and a Roth IRA?
- How much should I invest?
- What’s a mutual fund?
- What are fees?
- What’s the difference between stocks and bonds?
- What is risk tolerance? Isn’t the whole stock market risky?
4. Check out your library.
As they say, the library isn’t just for books anymore. Lots of local libraries—especially in larger cities and suburbs—offer community education classes. And a lot of times, those classes are free or extremely inexpensive.
They may also have educational DVDs or other resources you can check out.
When it comes to your retirement savings, make sure you understand what you’re doing before you take action, whether that’s the mutual funds you choose or the amount of money you’re putting away each month. Meet with a financial professional and talk through your options. Make sure they will patiently explain anything that doesn’t make sense. But remember, you need to be the decision maker. After all, it’s your retirement, and you want to feel confident about it!
Consider Bringing a Financial Wellness Program to Your Workplace
June is Employee Wellbeing Month in the United States. If you’re a leader or decision maker in your business, it’s a great time to consider a financial wellness benefit for your team members. Employees who understand the basics of budgeting, saving, debt and investing become more engaged and productive. Don’t wait another month—learn more about financial wellness at SmartDollar.com.
If you'd like to know your retirement number — how much it will take to live the retirement of your dreams — get your Retire Inspired Quotient (R:IQ) here!
About Chris Hogan
Chris Hogan is the #1 national best-selling author of Retire Inspired: It’s Not an Age. It’s a Financial Number and host of the Retire Inspired Podcast. A popular and dynamic speaker on the topics of personal finance, retirement and leadership, Hogan helps people across the country develop successful strategies to manage their money in both their personal lives and businesses. You can follow Hogan on Twitter and Instagram at @ChrisHogan360 and online at chrishogan360.com or facebook.com/chrishogan360.