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If you think your employees are prepared for retirement, think again.

Less than 40 percent of American workers feel like their savings are on track for retirement. In fact, 25 percent have no retirement savings at all, according to the Report on the Economic Well-Being of U.S. Households.

An Education Problem

Experts point to low financial literacy as a major factor affecting employees’ retirement prospects. Not understanding investment strategies or buying into a savings plan can significantly postpone retirement, sometimes indefinitely.

According to the economic report mentioned earlier, the average worker correctly answers fewer than three out of five basic financial literacy questions. And since low financial literacy can be correlated with bleak retirement prospects, this figure should be alarming.

How Employers Can Help

Many employees rely on their employer-sponsored savings plans for their retirement planning. Moreover, these plans are typically the only viable savings option available to people with limited investment knowledge.

Understanding this, employers can offer more comprehensive financial education to employees who vest in sponsored savings plans. For instance, some employers actively promote plan participation and offer in-person financial counseling to participants.

However, you don’t need to hire a team of financial advisors to raise employees’ financial literacy. Providing quality education materials is a great first step to improving your employees’ retirement outlooks.

Speak with Emery Benefit Solutions for a sampling of resources available to you; sue@emerybenefitsolutions.com