“Just as Corporate America has, by necessity, accepted basic skills training responsibility, which otherwise should have been learned through the formal educational system, so must Corporate America accept more responsibility for basic financial literacy. We have both savings and spending problems in the U.S. that are contributing to retirement income inadequacy.” — Barry Kublin, Chief Executive Officer Benefit Plans Administrative Services
When it comes to retirement savings, Americans are among the most ill-prepared in the world.
Such are the findings of an HSBC Bank study, which began gathering data in 2005 from a global pool of over 140,000 participants. Among the U.S. employees surveyed, 76% acknowledged that major life events—including job loss, major illness, divorce or the purchase of a home—have significantly derailed their retirement savings efforts.
The HSBC report concluded that employees’ ability to save for retirement is being severely hampered by increasingly difficult economic conditions that are strapping incomes and magnifying expenses. Compounding the problem, workers are going into debt at a younger age, preventing them from tucking away savings for the future. Unable to initiate a savings plans early on in life, they are forced to set aside more as they age.
In my twenty-eight years of working in the financial industry, too many times I have seen people look back on their lives and declare that they wish they had started saving earlier. Saving money is an extremely skill, yet it is not taught at school or, in many cases, at home by parents who often lack this skill themselves.
Employers have a unique opportunity to fill this void by providing financial literacy programs. These can benefit employees at every level by addressing both their immediate and long-term financial challenges.
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