Ninety Percent of Americans Don’t Know How Much They Can Contribute to 401(k) Plans
April 02 2015 - 9:40AM
Business Wire
Fifth Third Bank survey explores Americans’
financial literacy
Do you know how much money the IRS allows you to contribute to
your 401(k) if you are under the age of 50? According to a recent
survey from Fifth Third Bank (NASDAQ: FITB), 90 percent of
Americans do not.
Camino Smith, senior vice president and
director of Community & Economic Development, Fifth Third Bank.
(Photo: Business Wire)
“At Fifth Third, we were curious to discover how informed
Americans are about finances,” said Camino Smith, senior vice
president of Community and Economic Development, Fifth Third Bank.
“By conducting a survey, we were able to gain insight into
financial literacy in America.”
With April observed as National Financial Literacy Month, the
Bank commissioned a national survey that revealed insights on
Americans’ behaviors in checking and savings, 401(k) plans and
credit. While the survey found that nearly 60 percent of
respondents feel they are financially savvy, 44 percent of
Americans are living paycheck to paycheck. Other key findings from
the survey include:
- Less than half1 of millennials do not
know what a credit score measures.
- More than half of Americans2 do not
know the difference between secured and unsecured credit.
- Americans are two times more likely to
check social media daily3 than to check their savings or checking
account balances online daily.
- 88 percent of Americans know that APR
means Annual Percentage Rate, however, only 38.5 percent know the
APR on their primary credit card.
- 44 percent of Americans live paycheck
to paycheck and 60 percent do not have enough money in their
savings account to live for six months or more.
- 81.6 percent of those surveyed without
higher education or post-secondary education believe that having a
savings account is important; yet one third4 do not have one.
- 45 percent of millennials are
contributing to their 401(k) plan. But they might not be
contributing enough; only 13 percent know they are able to
contribute a maximum of $18,000 per year.
The survey also found:
- 64 percent of Americans know their
credit score.
- 85 percent know the current balance on
their checking account.
- 42 percent contribute to a 401(k) plan.
46 percent of those not contributing are not eligible, or their
company does not offer a 401(k).
“It’s encouraging to see that Americans are generally
knowledgeable and have a grasp on their finances,” said Smith.
“It’s clear, however, that there is a gap between believing oneself
to be financially savvy and having all the knowledge needed to
successfully manage one’s financial life. This is especially true
as it pertains to saving for the future.”
Fifth Third Bank provides its L.I.F.E. (Lives Improved through
Financial EmpowermentSM) programs at no cost to individuals at all
ages and stages of life. Fifth Third’s L.I.F.E. is a set of
financial programs that help educate consumers in the ways of
personal finance.
Fifth Third’s L.I.F.E. programs include
- Young Bankers
Club®: The Fifth Third Bank Young Bankers Club
introduces financial concepts to fifth-grade students, including
foundational knowledge about how money is earned, budgeting and the
importance of saving for the future.
- Dave Ramsey’s Foundations in
Personal Finance®: Fifth Third Bank is the
exclusive sponsor of this industry-leading high school financial
curriculum for high school students in the Bank’s footprint. The
program is taught by school teachers who are aided on video by Dave
Ramsey, one of America’s most trusted financial experts, and his
team. The course covers budgeting, dangers of credit misuse, and
includes lessons on insurance, investments and charitable
giving.
- Financial Empowerment Mobiles:
Traveling throughout Fifth Third Bank’s 12-state market, the
Financial Empowerment Mobiles, commonly referred to as the Fifth
Third eBuses, reach individuals and neighborhoods in low- and
moderate-income neighborhoods. The eBuses provide access to
professional financial guidance, such as credit score checks,
financial planning, and information about Bank services.
- Empower U®:
Originally developed as a service to Fifth Third business clients
as an offering to their employees, Empower U is a financial
planning program that is also available in the community. Empower U
is taught by Fifth Third employee volunteers and classroom topics
include identity theft protection, college savings, retirement
planning and more.
For more information about L.I.F.E., visit
https://www.53.com/life.
About Fifth Third Bank
Fifth Third Bancorp is a diversified financial services company
headquartered in Cincinnati, Ohio. As of December 31, 2014, the
Company had $139 billion in assets and operated 15 affiliates with
1,302 full-service Banking Centers, including 101 Bank Mart®
locations, most open seven days a week, inside select grocery
stores and 2,638 ATMs in Ohio, Kentucky, Indiana, Michigan,
Illinois, Florida, Tennessee, West Virginia, Pennsylvania,
Missouri, Georgia and North Carolina. Fifth Third operates four
main businesses: Commercial Banking, Branch Banking, Consumer
Lending, and Investment Advisors. Fifth Third also has a 22.8%
interest in Vantiv Holding, LLC. Fifth Third is among the largest
money managers in the Midwest and, as of December 31, 2014, had
$308 billion in assets under care, of which it managed $27 billion
for individuals, corporations and not-for-profit organizations.
Investor information and press releases can be viewed at
www.53.com. Fifth Third’s common stock is traded on the NASDAQ®
Global Select Market under the symbol "FITB." Fifth Third Bank was
established in 1858.
Copyright © 2015 Fifth Third Bank, Member FDIC,
Equal Housing Lender, All Rights Reserved.
1 46.8 percent of millennials knew what a credit score
measures.2 58.7 percent of Americans did not know the difference
between secured and unsecured credit.3 61.6 percent of those
surveyed will use some form of social media at least once a day.
30.7 percent check their savings or checking account balance online
at least once a day.4 30.2 percent of those surveyed with a high
school education or below do not have a savings account.
Photos/Multimedia Gallery Available:
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Fifth Third BankStacie Haas, 513-534-5113
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