Saving for retirement has traditionally been presented as a means to an end. People are told to make this or that occasional investment and voilà, funds will be available when retirement age arrives. However, as numerous sources of data prove, Americans are largely unprepared for retirement even after years of being “taught” how to do so.

With so many savings options available and approximately 50% of companies offering retirement training along with those options, why are the statistics so out of balance?

There are questions that have to be asked concerning the present form of retirement savings education. When retirement plan providers and financial advisers visit jobsites to provide educational sessions to employees concerning the saving of money for retirement, are they presenting the information in a way that connects with employees? It is obvious from the available data that a connection with the majority of workers is not taking place. We are often forcing the “retirement ready” conversation, when the reality is that the employee may be distracted by other financial stressors at the time.

The issues that are the most important to them are not being addressed, and in time slots that are the most convenient for them, so they are distracted.

Immediate needs
The “retirement ready” and enrollment conversations are not working because a specific agenda is being forced on them, one that does not readily meet their immediate needs, and they are not listening. However, if the conversation is changed to connect with those immediate needs, then it is more likely that their stress over personal finances will be lessened and positive feelings enhanced as they get a better handle on everyday financial issues. This would, in turn, lead to increased participation rates and contribution levels in existing savings programs. Not only are workers provided financial relief through such an outreach, but employers receive increased production and bottom lines and society is less burdened overall in the future.

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If the majority of people do not have a clear understanding of the savings process, then they will remain hesitant about making investments and prefer to continue using any extra money to lessen present financial conditions and stresses. This thinking is adequately reflected in the saying “a bird in the hand is worth two in the bush.” What employees need to see is that once that bird in the hand is consumed there is nothing left for tomorrow.

The other important question that needs to be asked is: Are employees being given clear guidance on how they can save for their retirement by truly addressing what behaviors need to change in order to free up funds to save for their futures? As has been shown, there are plenty of savings options available to working Americans, and yet relatively few are taking advantage of such retirement vehicles. And even those who do participate are saving at such low levels that they will not be able to retire as desired. If problematic spending and borrowing habits aren’t addressed, it will be difficult to reverse the current trends, and employers, employees, and society as a whole will all suffer as a result.

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Mark Singer

Mark Singer

Singer, CFP, is the author of three books, a frequent public speaker and the creator of The Financial Literacy Toolbox.