Increasingly, American workers are being required to make important decisions concerning their retirement savings. These choices include whether to make contributions to their basic and supplemental pension plans, how much to contribute to these plans, and how to manage the assets in their individual accounts.
Concern has been expressed that workers may start contributing too late, contribute too little, and make inappropriate investment choices. As a result, the value of accounts at retirement will not be sufficient to provide an adequate retirement income.
If lack of financial education is the cause of inadequate savings, could educational and communication programs heighten understanding of basic financial principles and lead to greater retirement savings and a better investment strategy? Additional research is needed to determine whether such programs alter savings attitudes and behavior in the short and long run and thus produce greater income in retirement.
A key research and policy question is: Are financial education programs effective in altering retirement savings goals and choices such as how much to contribute to retirement accounts, appropriate risk-return selections concerning portfolio allocations, income needs in retirement, and selection of retirement options offered by a pension plan? TIAA-CREF seminar participants respond to the information provided through the use of before and after surveys.
