Participant education

Probably because most advisors to retirement plans come from an investment background, plan education often focuses primarily on investment education. Investment education is very important even if a participant chooses a Qualified Default Investment Alternative fund targeted to their age. Investor behavior rather than investment results often have greater influence on the investment return the participant actually achieves. Investment education helps people sidestep avoidable investment mistakes.

The greater immediate need for retirement savers, however, is probably general financial literacy. Better decisions come from a better understanding under most every circumstance. When the circumstance is saving for retirement, having an understanding of how compounded returns can turn relatively small investments into a sizable amount and other similar key concepts helps move people to take action rather than succumb to inertia.

Seemingly every year a survey comes out showing the majority of workers in America are less than confident or have no confidence they will have enough money to retire on. Plan education should start first with how to fix that individual confidence level. Education is an ongoing process and one your advisors need to address.



Subject Reference Information