Addressing the Retirement Savings Crisis in the United States: The Role of Employer-Provided Financial Education

Abstract

Defined contribution savings plans, which shift the responsibility for retirement saving from the employer to the worker, cover an increasing number of American workers. In such an environment, providing workers with information and education about saving for retirement is very important. However, assessments of financial education programs offered in a range of locations (schools, workplaces, communities, etc.) have questioned the effectiveness of financial education. In this article, the author focuses only on those programs offered at the workplace and reviews three types of evaluations of the effectiveness of financial education: self-assessments, econometric analyses, and randomized controlled trials. All three types prove to be effective in increasing retirement savings.

TOPICS: Retirement, legal/regulatory/public policy, in wealth management