Time for our weekly financial literacy update, and once again, it’s not good news.
This time, we’re taking a closer look at retirement plans. According to a new poll, nearly half of all American employees believe they’ll be able to fall back on a pension when they retire.
“Despite all evidence to the contrary, pensions are still regarded as a safety net for retirement,” said Carl George, CPA, chair of the National CPA Financial Literacy Commission. “Americans have to understand that many of the entitlements of their predecessors are not guaranteed.”
Here’s the deal: Many traditional pension plans are being replaced by 401(k)s. But as good as 401(k)s are, only 14 percent of employees mentioned their companies’ 401(k) plans when asked about ways they save, and only 11 percent of Americans below the age of 35 say they contribute to their 401(k).
That makes the message in this “Feed the Pig” PSA all the more relevant:
It also makes the profession’s financial literacy efforts even more important. And now, the nation’s politicians are starting to take notice. H.R. 273, co-sponsored by Reps. Ruben Hinojosa (D-Texas) and Judy Biggert (R-Illinois), would designate April as “Financial Literacy Month.”
It’s one more small step in the journey toward improved financial literacy for all Americans, and it has the CPA profession’s full support.