Income Strategies

Teaching Retirement Readiness

Survey: Lack of financial knowledge provides opportunities for education

by Marsha Whitehead

Mrs. Whitehead is vice president of marketing communications for the retirement services division of OneAmerica® Marsha and her team are responsible for developing and implementing the marketing communication and participant education strategies for the retirement services division. For more information on this article or the findings from the survey email

Author’s Note: OneAmerica® regularly provides plan sponsors and advisors with insights to connect with plan participants and provide effective communications to help drive positive retirement outcomes.

We frequently seek feedback and solicit input, both in person and through virtual channels. Our newest participant survey, which resulted in more than 10,500 respondents, queried participants about their attitudes and behaviors toward preparing for retirement and their levels of knowledge about various personal finance topics.

We asked participants to share their thoughts and insights about:

  • The frequency of monitoring and the importance of understanding progress toward retirement goals
  • Triggers for attention to retirement planning
  • Plan features that are important and encourage retirement planning
  • Factors that are most likely to delay retirement
  • Knowledge level about specific financial topics
  • Incidence of hardship withdrawals and loans
  • Interest in receiving regular retirement planning communications and the preferred channels

For this survey we worked with Peter Dunn, also known as Pete the Planner®, to review the results and explore ways for plan sponsors to better serve their participants in a variety of demographics. Based on the survey findings, we have provided suggestions for ways plan sponsors can better engage with their employees to help them become more retirement ready.

A need for more education

We asked participants to self-report their levels of financial knowledge of common personal finance and retirement topics.

Those topics ran the gamut: growing your retirement account; using the power of compounding with contributions; understanding the consequences of taking a loan or withdrawal on a retirement account; assessing how taxation on benefits will impact Social Security.Across the board, the level of self-reported knowledge on these topics was low.

Even people who are actively engaged with retirement planning were admittedly in dire need of education about financial topics. 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, we can still do a better job at making participants more knowledgeable.

To illustrate the point, student loan debt — cited by experts as a common barrier to saving for retirement, particularly among Millennials — is perhaps the most well-known financial topic, yet in the survey, only 4 in 10 admitted to fully understanding it. Additionally, survey respondents acknowledged being the least knowledgeable about Savers Tax Credit (10 percent), taxation on Social Security benefits (13 percent) and advanced investing (14 percent).

Self-reported knowledge on such things as taxation on Social Security benefits, Savers Tax Credit and retirement account withdrawals all scored in the bottom, a key indicator of weaknesses that should be addressed. Plan sponsors need to understand and act on these weaknesses.

What is encouraging is participants across the board indicated they would like to receive more information and education about these topics. Plan sponsors have an opportunity to engage participants by expanding communications beyond basic retirement messages and addressing personal finance topics, such as student loans, compounding and how retirement income is generated.

...even as we’ve made retirement readiness easier to understand through the availability of online calculators and helpful videos, we can still do a better job at making participants more knowledgeable

Target messages to make the most of communications

We analyzed the survey results by gender and age, and we saw workers have clear preferences based on these demographics.

Differences between genders

Regarding gender in retirement planning, our survey revealed men thought about retirement more often than women; 69 percent reported thinking about it at least monthly, compared to 55 percent of women.

Men also reported talking about retirement frequently with work colleagues and believing they were more educated about tools needed to prosper in their golden years. In the most dramatic example of the difference between the sexes, men self-scored themselves as having a significantly higher level of knowledge than women across the personal finance and retirement topics, including student loans and taxation on Social Security benefits.

We’ve known for quite some time that men and women don’t just think about retirement differently, they also talk about it differently. By understanding these differences, plan sponsors can tailor their education programs to increase the influence they have on male and female participants.

Two substantial differences in past triggers were evident. Men were more likely to discuss retirement with work colleagues (29 percent) compared to women (22 percent) and to cite a story in the news or media (16 percent vs 11 percent of women) about retirement.

The results also showed some similarities between genders. When it comes to retirement plan features, men and women both placed the highest priority on a common workplace perk — an employer match on the employee’s contribution to the retirement plan being offered. It was ranked No. 1 by both sexes, although women were more likely to place higher importance on the employer match (64 percent vs. 61 percent of men), while men were more likely to place importance on investment options (29 percent vs. 21 percent of women).

What is clear is that men and women display clear differences in how they think about and prepare for retirement. Plan sponsors should consider developing participant communication and education programs that cater to the specific interests and preferences of each gender.

For example, plan sponsors could share a news story about retirement planning with their male population, because men are more likely to be influenced by news stories in the media. Alternatively, educational communications that are tied to significant life events — such as marriages, births, divorces — may be more influential and effective for women.

Generational Preferences

The survey results show age-specific strategies, rather than a one-size-fits-all approach, may be the most effective method for plan sponsors to address retirement readiness; the survey illustrated the difference between Millennials in the workforce and those closer to the end of their careers.

Not surprisingly, we found frequency of retirement thought clearly increases throughout life, with a particularly steep increase between participants 35-49 years old and those 50 years or older. Twenty-three percent of men and women younger than 35 years considered it weekly, compared to 27 percent of those 25-49 and 45 percent of those 50 and beyond.

The survey also showed that younger participants were more open to “new and interactive” types of communication and engagement. Participants younger than 35 are almost two times as likely to welcome text message notifications than respondents age 50 and older. Plan sponsors should consider facilitating a “friends and family discussion” by providing materials that help introduce topics and guide the conversation, especially for the youngest age group, due to the influential nature of so-called water cooler chats.

Plan sponsors can build upon their communication approach by going beyond merely offering retirement benefits to their employees; employers should actively promote the advantages of signing up – a task that becomes progressively more difficult as their workforce ages. Employer promotion of the retirement plan is most effective at spurring those younger than 35 (40 percent), followed by 35- to 49-year-olds (32 percent) and lastly those aged 50 and older (32 percent).

The older participants get, the less effective workplace promotion of retirement benefits is. It’s imperative that plan sponsors and financial professionals get involved early. They need to think of themselves as a trusted resource for their employees — particularly those younger than 35. They have an opportunity for an influential role that includes guidance, retirement education, communications and resources to promote financial wellness. They can be advocates.

While employer-provided information and education is imperative for participants of all ages, these communications alone are not as effective for older participants as they are for participants who are newer to the workforce. For employees 35 and older, plan sponsors should consider tying communications to other, more influential retirement thought triggers. For example, sending information to participants’ homes, where friends and family are more likely to see the communications and have discussions about them, may be an effective way to leave an impression on older employees.

Plan sponsors may also want to educate participants about how certain plan features can affect retirement outcomes. Participants may not be placing importance on certain plan features because they don’t understand the role those features play in affecting their retirement income. Given American workers’ lack of financial knowledge, communication is especially important. Misunderstanding how time plays into retirement preparation is an irreversible problem. Lost time is worse than lost money. Participants can earn more money, but they cannot earn back more time. Without compounding, $100 cannot transform into $800 over time with moderate returns, for example.

Based on these survey results and our experience in the retirement industry, we believe by providing not only retirement education, but comprehensive financial wellness education, plan sponsors and financial professionals can help employees get control of their financial lives, address immediately pressing financial concerns and help clear the way for participants to gain control of their financial lives and focus on preparing for retirement. ◊



Note: OneAmerica is the marketing name for the companies of OneAmerica. Products issued and underwritten by American United Life Insurance Company® (AUL), a OneAmerica company. Administrative and recordkeeping services provided by McCready and Keene, Inc. or OneAmerica Retirement Services LLC, companies of OneAmerica which are not broker/dealers or investment advisors.
The views and opinions expressed by Peter Dunn (aka Pete the Planner) are solely his and do not necessarily reflect the views and opinions of the companies of OneAmerica. The information is provided for educational purposes only and is not intended as financial or legal advice. Pete the Planner is not an affiliate of any OneAmerica company.