Introduction
Consumers in today’s society are presented with an overwhelming amount of financial responsibility. On a daily basis, individuals are expected to be comprehensive of advanced financial decisions. An important aspect of one’s financial portfolio is planning for retirement. These decisions have carried a heavier weight on the economy since the 1980’s when employers began to move to defined contribution plans rather than defined benefit plans. Before, companies originally sponsored employee retirement plans, sorting future funds for its workers using factors including salary history and total years of employment. More recently, employers are opting to save money by transitioning to defined contribution plans. Defined contribution plans place more responsibility on the individual employee. Employees are no longer receiving professional …show more content…
Representatives in this sample are the participants of the ALP. Along with many other categories, a specific module addressing financial literacy and retirement planning was first implemented in 2004. The most recent data set which assesses financial literacy can be found in the HRS 2010 Core, Modules 7 and 8. In a series of questions, respondents’ level of financial literacy, budgeting efforts, and ability to calculate/develop retirement savings plans were assessed. Topics presented to determine respondent’s level of basic financial literacy included interest, inflation, risk diversification and asset returns. Those surveyed were also asked to rate their level of economic understanding, willingness to participate in the stock market, stresses concerning money and to state the number of economic courses they had taken. These questions are also prevalent in several other financial literacy surveys, domestic and
Consumers in today’s society are presented with an overwhelming amount of financial responsibility. On a daily basis, individuals are expected to be comprehensive of advanced financial decisions. An important aspect of one’s financial portfolio is planning for retirement. These decisions have carried a heavier weight on the economy since the 1980’s when employers began to move to defined contribution plans rather than defined benefit plans. Before, companies originally sponsored employee retirement plans, sorting future funds for its workers using factors including salary history and total years of employment. More recently, employers are opting to save money by transitioning to defined contribution plans. Defined contribution plans place more responsibility on the individual employee. Employees are no longer receiving professional …show more content…
Representatives in this sample are the participants of the ALP. Along with many other categories, a specific module addressing financial literacy and retirement planning was first implemented in 2004. The most recent data set which assesses financial literacy can be found in the HRS 2010 Core, Modules 7 and 8. In a series of questions, respondents’ level of financial literacy, budgeting efforts, and ability to calculate/develop retirement savings plans were assessed. Topics presented to determine respondent’s level of basic financial literacy included interest, inflation, risk diversification and asset returns. Those surveyed were also asked to rate their level of economic understanding, willingness to participate in the stock market, stresses concerning money and to state the number of economic courses they had taken. These questions are also prevalent in several other financial literacy surveys, domestic and