Everyone knows that their are programs in place that can help them to save money, be it for college, retirement, or anything in between. However, a new survey reveals that less than one third of workers understand the most common financial products currently available in the market. The study, which was conducted by The Guardian Life Insurance Company of American, asked workers whether they had a “solid understanding” of the following financial products. The results suggested that:
- Just 32 percent of workers said they had a solid understanding of 401(k) and other workplace retirement plans.
- 27 percent understood other IRAs, and 24 percent understand Roth IRA
- 26 percent reported understanding individual stocks and bonds
- 25 percent understand mutual funds
- 25 percent have a grasp on pensions
- 23 percent understand term life insurance
- 23 percent know about disability insurance
- 23 percent report knowing about 529 college savings plans
- 22 percent understand whole life insurance
But what can you, as an HR exec do, to help bolster understanding? The survey suggests that in order to help workers garner a better understanding of their finances — and the financial products available to them — is through one-on-one education.
To back up this thought, research by The Principal Group found that contribution to savings among workers who attended a one-on-one session the organization offered were 9 percent higher than those who didn’t attend the seminar at the one year mark. Further, 92 percent of the employees who were enrolled in Principal’s education program agreed to take a number of positive financial steps, and 80 percent of those workers followed through on those steps.
Do you offer financial counseling services through your company? Let us know in the comments.