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Why 401(k) education has failed

The problem with 401(k) education goes far deeper than the mere use of industry jargon.

By Chris Carosa | Updated on October 08, 2014

Jargon, jargon, jargon, everyone complains about jargon. But the root cause of problems in 401(k) investment education goes far deeper than mere jargon. Its source lay at the very feet of our broader educational institutions. Why should we expect our 401(k) education outlines to succeed when, for the most part, they’re patterned after the same failed model of secondary school education? 

If you extend the metaphor, it’s a lot easier to understand why financial professionals are so frustrated by the lack of action by both employees and plan sponsors following the typical education session. In both the 401(k) education context and the secondary school education context, the educators don’t speak the same language as the students. As a result, we have lesson plans developed that work well for educators teaching educators, but flop when translated to their intended audience. 

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