Debt Payoff Improves, Retirement Still a Concern
Paying down debt continues to be a top priority for many consumers.
According to a study from Financial Finesse Inc., a workplace financial education provider, since the first quarter of 2010, there has been an increase in the number of employees who have consistently paid off the credit card debt each month, paid their bills on time and built an emergency fund.
The El Segundo, Calif., company gathered the data from its helpline, which its clients’ employees call to get assistance on financial concerns.
During the first quarter this year, there were fewer calls about financial hardship issues, bankruptcy, eviction, and other emergency issues. Those who called about retirement were focused on saving and investing for retirement rather than taking loans and hardship withdrawals from their retirement plan.
According to the study, 15% of employees are confident they are on track to meet their retirement goals, which was a drop from 18% in Q4 2010.
The report also identified a big area of concern in employees’ investing knowledge with only 34% of employees being confident their investments are allocated appropriately for their time horizon and risk tolerance. This, despite 77% of employees who indicated they understood the basics of stocks, bonds and mutual funds.
Still, more employees are participating in company-sponsored retirement plans. Financial Finesse said the percentage of participation increased from 83% in 2010 to 91% in the first quarter of 2011.