Americans are lagging when it comes to retirement know-how. The financial services industry has taken notice, and one group has a plan to help close that knowledge gap and change consumers’ investing behavior.

Here’s a frightening statistic: When more than 1,000 Americans ages 60 to 75 were given a basic financial literacy test on making their money last through retirement, 80 percent failed. Despite that fact, 55 percent of those surveyed by the American College of Financial Services considered themselves well prepared to meet their income needs through retirement, and 91 percent were at least moderately confident in their ability to achieve a secure retirement.

The results of ACFS’s Retirement Income Literacy Survey, released earlier this month, highlight a problem that many in the financial services industry are already tuned in to: A retirement knowledge gap exists, and something needs to be done to fix it.

“This survey was really consistent with what we’re already seeing. The general knowledge and literacy levels of Americans of all ages, even those that are about to walk right to the door of retirement, are very low,” said Jerry Patterson, senior vice president of retirement and investor services at Principal Financial Group.

What’s the answer? While closing the knowledge gap involves education, Patterson said, the more important facet is consumers’ investing behavior.

“Think about it this way: Everything you ever need to know to educate yourself about the ins and outs of retirement planning, you can accumulate that knowledge in one hour on Google,” he said. “So as much as we think education is certainly important and always will be, we think that the industry and plan sponsors and advisors and individuals need to focus more on changing Americans’ behavior.”

To that end, last year Principal launched its Plan Works initiative aimed at getting employers to adopt more aggressive investment plans that employees are auto-enrolled into.

“We’re seeing that nearly half of employees are not participating in the organization’s plan, a large percentage of those that are participating don’t take full advantage of the employer match, and a larger percentage are saving half as much as they should—so I think it’s fair to say most plans don’t work,” Patterson said. “There are a whole bunch of misconceptions getting in the way about the cost for employers and popularity among employees of these plans. But organizations that have adopted them are seeing a great deal of success.”

And to address the education aspect, the company launched a redesigned account landing page for plan participants.

“Rather than trying to create a space and experience where people need to go to get educated—something we do have—we were looking to find a way to interact with users where they were already going,” Patterson said. “We know almost every participant in our 401k plan goes to their account landing page at least once a year to look at how they’re doing, and so it was very easy for us to bring the tools to them with the new design.”

Patterson continued: “There’s a huge amount of learning going on right now within the industry, but I think it’s an exciting time and as we continue to blaze forward with these changes and new approaches, we’re going to see much better results.”

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