Research Shows Need for Financial Wellness Initiatives

In a recent OneAmerica survey, we asked retirement plan participants to self-identify their levels of knowledge across 10 retirement and personal finance-related topics. According to the survey results, the overall level of personal financial knowledge among participants is low. Only 40 percent of participants consider themselves either knowledgeable or very knowledgeable about retirement savings, specifically. 

The 40 percent of participants who are either knowledgeable or very knowledgeable about retirement savings represent the highest level of acumen among the 10 financial topics about which participants rated their financial knowledge, indicating overall financial knowledge among participants is low. For example, only 13 percent of respondents self-identify as being knowledgeable or very knowledgeable about Social Security taxation, which is disconcerting given that 100 percent of participants will have to deal with Social Security taxation.

Although the survey data suggests that men have more confidence than women in their financial knowledge base, the overall lack of financial knowledge self-reported by survey participants could have significant implications. A lack of general financial knowledge can often lead to under use of retirement plan benefits. When people fully comprehend their options, they are more likely to act. One of the most troubling findings involves compounding. Only 36 percent of men and 18 percent of women knew how compounding affects retirement accounts. This is bothersome because understanding the power of compounding can bring hope and motivation. If these respondents don't understand how compounding works, they may feel hopeless.

Learn strategies for helping your participants understand compounding and other financial concepts. For detailed survey results, analysis and suggestions for how you can better connect with and educate your employees, request a copy of the participant survey white paper.