Only 26% of Older Americans Are Retirement Literate, Study Says
Although many Americans are living longer, there is still a significant number of older adults in the United States who haven’t adequately planned for their retirement. A recent American College of Financial Services study found that the majority of seniors are surprisingly uninformed when it comes to financial planning.
It’s more crucial than ever before to strategically budget and plan finances for the last third of life to not outlive financial assets – especially for family caregivers. Learn more about how to become fiscally educated and retirement literate.
Older Americans Need to Become Retirement Literate
The Journal of Financial Planning research study showed data from approximately 1,200 Americans between the ages of 60-75, with at least $100,000 in investable assets. The data set did not include many lower-income Americans and confirmed that even Americans who have been actively saving with some sort of ‘financial plan’ are not financially or retirement literate.
The research questions were focused on financial planning and retirement around different topic areas, such as Medicare, retirement plans such as 401k, Social Security and taxes to gauge America’s retirement income preparedness and literacy rates. The results were troubling:
Only 26% of respondents were able to pass the quiz with a score of 60% or higher with the mean score a bit less than 50% percent.
Respondents scored highest on the Medicare planning questions and lowest on annuity products.
One of the biggest takeaways from the research was that people who were financially literate and had enlisted the help of a personal financial advisor were far more likely to be able to proactively handle their finances. According to the research, those who passed the quiz were:
- 46% more likely to have a long-term care plan and insurance in place
- 36% more confident they could manage their investments in retirement
- 16% more likely to have a written retirement plan in place
- 8% more likely to have an estate plan in place
- 7% more likely to take reasonable market risks when investing in the market
The bottom line of the study was that the people who took the time to get an organized plan in place by either educating themselves of or outsourcing to a professional were the people who were ready for retirement.
Ways to Get Fiscally Fit for Longevity
These tips to help expand your retirement income can help you increase your cash flow. Whether it’s cutting costs in senior living, enlisting the help of a professional financial advisor or being strategic with expenses; there are ways to make retirement savings last longer.
While the average life expectancy in the U.S. is 78.7 years, life expectancy is continually increasing. This is why it is important to equip a retirement fund for a lifespan of 100 years. Connect with an expert fiduciary advisor to get educated and learn about financial options that could save your family money.
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