Em­ploy­ees flunk re­tire­ment quiz


Work­ing Amer­i­cans of all ages are plagued by wide­spread mis­con­cep­tions and pro­cras­ti­na­tion that could un­der­mine their re­tire­ment readi­ness — un­less they de­vote enough time to learn­ing ba­sic con­cepts, Fi­delity In­vest­ments’ first-ever Re­tire­ment IQ Sur­vey finds.

Most no­tably, as many as two-thirds of the re­spon­dents un­der­es­ti­mated what they will need to save for re­tire­ment.

While not­ing that progress has been made to move the nee­dle on re­tire­ment readi­ness, Ken Hev­ert, SVP of re­tire­ment at Fi­delity In­vest­ments, says the sur­vey’s knowl­edge gaps point to the need for bet­ter ed­u­ca­tion from em­ploy­ers.

“We rec­og­nize how im­por­tant it is for em­ploy­ers to en­gage with their plan par­tic­i­pants as early as pos­si­ble be­cause it’s of­ten in the work­place where peo­ple first learn about what they need to do to pre­pare for re­tire­ment,” he says.

The sur­vey iden­ti­fied pro­cras­ti­na­tion as a se­ri­ous con­cern. More than half of re­spon­dents con­fessed to putting off an im­por­tant fi­nan­cial de­ci­sion such as cre­at­ing a bud­get, pay­ing bills on time or sav­ing for re­tire­ment.

Many peo­ple sur­veyed, in­clud­ing those age 55 and older, gave wrong an­swers to ques­tions in nearly ev­ery cat­e­gory, even though it was a mul­ti­ple-choice for­mat, ac­cord­ing to Hev­ert. He says the av­er­age grade was 30% (the equiv­a­lent of an F), no one an­swered all 14 ques­tions cor­rectly and 1% got all of the ques­tions wrong. Fewer than 0.5% of re­spon­dents re­ceived a 79% (C+), which was the high­est grade.

The ques­tion most peo­ple an­swered cor­rectly con­cerned the age of Medi­care el­i­gi­bil­ity (77% got it right).

De­spite th­ese poor test re­sults, Hev­ert em­pha­sizes that by spend­ing just a few hours on the sub­ject, em­ploy­ees can boost their Re­tire­ment IQ scores dra­mat­i­cally and de­velop a good grasp of the es­sen­tials needed to make smarter de­ci­sions that can put them on the path to a se­cure re­tire­ment. Em­ploy­ers also can help work­ers think about the goals they want to achieve and de­velop a plan to get there.

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