Americans are painfully terrible at not saving for retirement — but what exactly is holding them back?
One reason may just be a pure lack of fundamental knowledge about the subject. A new study by Fidelity Investments found nearly three-quarters of respondents did not know how much investment professionals recommend a person needs to retire and underestimated the amount, while only 8% could say how often though the past 35 years the market has had a positive return (hint: 30 out of the past 35 years).
Experts agree things could be a little clearer for the average investor — especially through better education.
"For years we have stood in retirement plan enrollment and education meetings using terms like asset allocation, diversification and compounding, when more than half of the people in the audience can't balance their checkbook, don't have a budget and are in debt up to their eyes," said Brad Bonno, senior vice president and director of product delivery at PNC Retirement Solutions. "Financial education has to start with the basics, which will provide the foundation they need to then focus on becoming retirement ready."
Bonno said one major way to improve Americans' retirement readiness is for more companies to adopt comprehensive health and financial wellness programs.
"Such programs help a company prosper not only in terms of attracting the best talent but will help them see increased productivity, lower health care costs and a higher percentage of employees that can retire on time," he said.