Ninety Percent of Americans Don’t Know How Much They Can Contribute to 401(k) Plans
Fifth Third Bank survey explores Americans’ financial literacy

4/2/2015

CINCINNATI – 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.

"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 half of millennials do not know what a credit score measures.
• More than half of Americans do not know the difference between secured and unsecured credit.
• Americans are two times more likely to check social media daily 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 third 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 Bancorp

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. FDIC, Equal Housing Lender.