Chad Parks didn't know he would become a retirement guru.

But when he chose to focus on personal finance, as opposed to corporate, during his master's education at Golden Gate University the "seed was planted." He got licensed in financial planning during his tenure as a retail stockbroker and began working with small business owners in his investment advisory practice. That's when the light bulb went off - he was always recommending that each small business get a retirement plan in place to coincide with their employee benefits. He didn't see any products that met his clients' needs. "One thing led to another, and I started The Online 401(k)," he says.

So, at the age of 28, Parks was an entrepreneur and chief executive officer in the 1999 tech start-up boom. He hasn't looked back since. His goal: to provide the approximately 40 million people who work at small businesses with an opportunity at a retirement savings account through their employer.

He says the 2010 U.S. Census showed that 92% of businesses between two and 20 employees (with 4 million businesses this size, that's where the 40 million people estimation comes from) don't have 401(k)s in place for employees. His passion for teaching employers and employees about retirement has only grown over the years. And that's why he set out last summer, along with fellow The Online 401(k) employee Andrew Meadows and a group of filmmakers, to hear about the retirement crisis in America and document it first-hand. The final documentary, called Broken Eggs, is set for release in late summer.


More than business

"We're looking at a major concern about retirement," Parks says. "This film, it is not a commercial for The Online 401(k), it's about asking the question: 'How did we get here?'" He's less concerned with the film impacting his business than he is with impacting the 29% - almost one-third - of Americans who aren't saving for retirement at all.

"I have a personal interest in the film, it's a 3D puzzle we brought together," he says. "Andrew and I did 6,000 miles last summer and we knew some of the story we wanted to tell, but we more so wanted the story to tell itself. We wanted to discover."

Parks and Meadows piled into an RV during their seven-week trip and now have a story exploring the retirement plans of three main characters: a boomer couple, a Gen X-er and a Millennial. Meadows, who conducted many of the interviews in the film, is enthused about the potential impact. "The three-legged stool is out the door," he says. "There are no pensions, Social Security won't be left and it leaves you with a very unfortunate one option of personal savings."

"We're not Hollywood," Parks continues. "This is meant to be informational and create a conversation and make people think, 'I probably gotta do something about that.'"

Parks, the executive producer on the film, has been "pretty hands on" with the creation and vision, but not as much in post-production. "I don't know how I'll react when I see the final thing," he says. "But if it changes people's behavior, that's a success."


Outside the box

A movie isn't the only way that Parks and his team are trying to tackle financial education in America. "I always say that it's a shame that I had to get a master's to understand the basics of personal finance," Parks says. He acknowledges, like many in the industry, that financial education is still lacking from schools - and that's where Meadows comes into the equation. Known more specifically in some circles, such as Twitter, as "the coolest 401(k) guy," Meadows' official title at The Online 401(k) is consumer and brand ambassador. His job: reinvent financial literacy. He took a different path to the finance world than most. He majored in broadcast journalism but entered the 401(k) industry years ago as a call center representative. He was tapped for a larger role by Parks, who saw a special enthusiasm in him through hard work and creativity on how to make a dent in the American dialogue about retirement.

"My goal in life is to take the fear out of 401(k)," Meadows says. "I'd love for there to be some sort of way to measure, like a credit score, how people are doing with their savings. There used to be shame in credit scores and now there's songs and jingles and I'd love a retirement score to gamify savings." Gamify - the act of turning education, shopping, really anything, into a game - this is a word that both Meadows and Parks emphasize as an important next step for the company's financial education programs for employers and employees.

"Gamify anything and people will learn about it and talk about it," Meadows says. "It gets people to share it, too." Parks agrees and laughs saying, "people will spend real money on fake things in games." He says they're looking into gamifying the rewards of 401(k) savings and this is a huge next step for the company. Parks adds that because there is no immediate gratification around saving for retirement, games could be a key to unlocking the conversation with many people who have not yet been able to turn their attention to this important subject.

Meadows' other responsibilities in his position are solely dedicated to education, include blogging, Facebooking, tweeting from his own Twitter brand, as well as the company's, and managing LinkedIn. "It looks like one third of the people engaged on LinkedIn are senior-level employees," he explains. "So that's a really important medium to educate employers and employees."

His more outside-of-the-box jobs include creating memes, such as their financial advice dog that is intended to make people laugh and then think about their own financial situation and change it, developing quizzes for people to determine what sort of investor and/or saver they are and appearing as a guest expert on various mediums, such as Reddit. And he's dreaming up more ideas every day. The best part about his job? "Everything that we do is available to access by everyone," he says. "I would say our clients specifically check it out more [now, but] our higher goal and mission statement as a company is to help every small business."


The status of financial literacy

The exact measure of financial literacy rates vary state by state because of different education programs and rules for measurement. But industry research group LIMRA looked at 2,000 Americans this April and asked them a series of questions about basic financial and retirement topics - only one-in-eight Americans could correctly answer most of the questions. Thirty-six percent of respondents failed the quiz, "answering no more than half of the questions correctly," according to LIMRA. The questions included calculating interest accrued in a savings account for a certain number of years, the difference between a single stock and a stock mutual fund, what a Roth IRA means for tax purposes and details about 401(k) contribution limitations. LIMRA says only 27% of Americans responding have a "high-level" of financial knowledge based on the results.

So what can be done to improve this, especially in the retirement sector where Parks says so many Americans may be "doomed?" To go back to the basics a bit, Nick Hammelman, director of employer and participant services at Northwestern Mutual in Reston, Va., breaks it down. "Financial planning is a broad concept and it's important to recognize that there are three categories: risk management, wealth accumulation and wealth preservation and distribution," he says.

Those factors aren't changing, so what Americans need to know isn't really going to change either, but the approach does. Hammelman says the fast pace of life and bombardment of information for adults places a challenge on the average American to learn about their financial and retirement planning options.

"I don't think we arm kids well enough at elementary school about how finances work and I don't think we educate our kids in the financial vein about the risks," he continues. "There's the need to plan and the need to save. If you're going to have an opportunity to see change, it needs to start rudimentary in elementary school so when you're launched into the real work there's a context that exists. It's often delivered in silos."


Where to start

The call for intervening with children about money at an early age is nothing new. Neither are books for 20-somethings who are thrown into their first jobs with no clue about how much money it takes to get through a day - let alone what questions to ask and decisions to make about employee benefits like retirement. But Mike Masiello of Masiello Retirement Solutions in Rochester, N.Y., doesn't think parents naturally turn to a book store for their young adult children to learn about finances. He noticed, after many years of getting questions from clients about whether he can talk to their 20-somethings about the rules of the road in finance, that he needs a quick guide to hand out. He's turned it into a book called The Twenty-Something's Guide to Money and More and isn't worried so much about the sales as he is about finally having a tool to help all the people who have questions for him.

"Most companies throw you to an HR director who isn't qualified to give you financial advice," Masiello says. "How many holdings do you have, what's the company match, how much to put in. These [young people] just don't get good guidance, and if we can start 20 year olds out better they're going to be in a much better place down the road."

Having a book, a guide or tool on hand is a helpful suggestion for any planner or adviser to hand out to 20-somethings or people of any age who are looking to increase their knowledge. Masiello recommends The Millionaire Next Door by William D. Danko as another good consumer-friendly read in addition to his own.

So what is Masiello's tactic when he does have a 20-something's ear about finance? "I try to shock the hell out of them and tell them to wake up!" he says. "People think, 'Well Sally and Jane have $400 purses and they're in debt so who cares, why can't I be?'"

He says he ends up talking to about eight to 10 young people a month through references and he hopes to reach more through the book. "The biggest problem I'm facing is immediate gratification," he adds, saying that he's willing to fight and argue with people every day if it means getting people off their credit cards and spending and saving intelligently.

Gerald Wernette is the principal and director of Rehmann Retirement Builders in Farmington Hills, Mich., and is trying a different approach when talking with employees about their retirement options. "Instead of, with a 401(k) for example, telling them what's a stock and what's a bond, we're focusing now on starting with the end in mind," he says. "I tell them, 'You want to retire someday, let's talk about what that's going to look like.'"

He talks about how retirement will work, that they'll need income and what it's going to take to start it. "We're working everyone backwards and at the end of the day it's been producing more successful results in garnishing interest," he adds.

Wernette says the best example of success is within his own company, "as diverse an organization as any other." They started taking the "backwards" approach in addition to introducing a new interactive tool that includes a virtual person walking everyone through the financial planning information.

"We had an 88% usage rate, and out of those people we had 82% make what we felt was a good decision in electing to be in the plan and increasing their current contribution rate, along with making what I would call a good investment decision in electing to utilize one of the core investment options that were built around asset allocation models," he explains.

He adds that the key with approaching employees anywhere is taking a new approach, talking on their level and giving them the big picture. This will create what he calls a "meaningful impact."

The Online 401(k)'s Parks couldn't agree more that jargon needs to be eliminated. "We in the industry tend to overcomplicate things," he says. "People are paying for service they don't understand. If you go to the grocery store or buy a car, you don't sit back and not ask questions about price."

In this business, he says advisers need to remember to be a layperson right along with their clients.


The future

Parks "doesn't want to be a doomsdayer," but with the 30 million baby boomers retiring, he's very concerned about "what will happen to money and the economy."

He says that while people like himself, Meadows, Masiello and thousands of other financial planners are doing their part to educate the American public, they can't do it alone. "It's a high-risk situation," he says. "I think the government is going to need to create mandates and incentives for businesses and individuals to save."

But until then, Meadows is fine trying to touch a new person about retirement one day at a time. After all, he says, "No one likes talking about 401(k)s more than I do."





LIMRA released findings in April of the financial literacy of 2,000 Americans, measuring everything from basic stock knowledge to 401(k)s and Social Security. After finding that nearly a third of American respondents answered half or more of the questions wrong, LIMRA also released four ways that financial institutions, schools, employers and the government can help Americans improve their financial knowledge:

* Educate early: According to LIMRA, 24 states have some type of financial literacy requirement for K-12 education. Conversely, 26 states have absolutely no financial education program regulations. "Our research found that younger people are inclined to overestimate their financial knowledge; earlier education could help bring their actual knowledge level up to their perceptions," LIMRA says, adding that those who are exposed to financial education in high school tend to have higher savings later in life.

* Educate in the workplace: Like many things that we learn in high school, financial education won't stick unless it's reinforced throughout a person's entire lifetime. LIMRA says worksite education programs are important, many of them focusing on transactional activities - how to enroll benefits like health and 401(k)s and how to select options within those. A broader series of education classes or materials on "life planning topics like saving, debt, insurance, and retirement can be very helpful."

* Acknowledge and address differences: LIMRA reminds us that men and women have very different knowledge levels about money and varying perceptions about that knowledge. Men are more inclined to think they are very knowledgeable about money. "Differences in confidence levels, as well as actual knowledge levels, should be addressed as part of a targeted education program," LIMRA says.

* Communicate resources: There are all kinds of options for people to get up to speed on money on their own time. Countless websites, financial institutions, books, organizations and financial planners and advisers exist to support the general public, but people need to be reminded about where to go for this information, in addition to the importance of doing it.

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