Financial awareness and retirement confidence

The Consumer Retirement Index for the fourth quarter of 2019 shows that only 26% of working-age Americans surveyed are very confident about retirement. These same Americans also have more financial awareness than the average working-age U.S. adult.

Awareness of financial markets and the economy

Those who are very/extremely confident about all three key aspects of retirement are more than two times more likely than the average working-age adult to follow the financial markets and economy very closely.1

In comparison, only 16% of all working-age U.S. adults say they follow financial markets and the economy very closely.2 This may be the result of a lack of financial education.

This chart shows how interested our survey respondents are in financial markets and the economy.

How closely would you say that you follow financial markets and the economy? Very closely 16%, Somewhat closely 41%, Not at all closely 41%

Participants want to learn about finance

Participants want to know more, and 75% have learned about at least one financial topic in the past year.3 The three themes that most interest participants are:

  • How to know if you’re on track with your savings
  • Choosing the right investments in your retirement plan
  • How to budget

Notably, 59% of participants turn to their employer or plan provider as a source of information about financial topics.4 This offers a significant opportunity to provide the education they’re looking for and help boost their confidence.

Financial education may help

Those who are confident about retirement may have invested some of their money, making them more likely to follow financial markets and the economy. Seeing that they’re doing well may generate confidence about retirement.

Encourage employees to pay more attention to the economy or provide market and economic updates in company newsletters. Consider offering education about investing. Financial professionals, such as advisors or Lincoln retirement consultants, can help participants understand topics like market trends, managing retirement savings, and setting retirement goals.

Frequency of retirement account reviews

Those who are very/extremely confident about all three key aspects of retirement are 55% more likely than the average working-age adult to review or manage their retirement accounts more than once a year.5 Those who are very/extremely confident are 85% more likely to review their retirement accounts monthly or more.6

This chart shows how frequently the very/extremely confident participants check their retirement accounts. How often do you review or manage your retirement savings accounts? Weekly 10%, Monthly 14%, Quarterly 18%, Annually 11%, Rarely/never 19%, I don't have a retirement savings account 28%

Encourage retirement account reviews

Those who are confident about retirement may be more motivated to check their retirement accounts. On the other hand, those lacking confidence may not want to review their accounts. If people look at their accounts more often, the increased familiarity with retirement savings may help boost confidence.

Encourage participants to periodically review their retirement accounts. You also can offer retirement planning education. Lincoln online accounts make it fast and easy for employees to conveniently check their accounts 24/7. Our online accounts also include helpful education and tools, such as the retirement income estimator, that allow participants to check their progress and see if they’re on track.

Whether it’s because they’re active investors or are personally interested, people with a broad financial awareness are much more confident about retirement.

1 CivicScience, data collected from October 1, 2019, to December 13, 2019.

2 Ibid.

3 Lincoln Retirement Power® Participant Study, 2019.

4 Ibid.

5 CivicScience, data collected from October 1, 2019, to December 13, 2019.

6 Ibid.