Financial knowledge is essential to planning and saving for retirement.
2 minute read
Individuals with greater financial knowledge are more likely to plan and save for retirement, according to TIAA and the Global Financial Literacy Excellence Center at the George Washington University School of Business. Lack of financial education can have a devastating impact on a person’s financial journey and be a significant hindrance to their long-term economic security, opportunity and mobility.
Tiffany Aliche, an award-winning teacher of financial education, best-selling author and founder of the financial education firm, The Budgetnista, specializes in empowering individuals—especially women—to create, implement and automate their financial plans. She believes having the right financial knowledge, from kindergarteners to Baby Boomers, is invaluable to achieving financial wellness throughout life.
Recently, Aliche partnered with a New Jersey assemblywoman to write a bipartisan bill that was later signed into a 2018 New Jersey state law requiring financial literacy education for middle school students. The comprehensive curriculum teaches New Jersey teenagers critical lessons in sound financial decision-making and covers real-world topics, including debt, credit cards, investing, saving and budgeting.
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What do middle schoolers have to do with living a full life in retirement?
What do middle schoolers have to do with living a full life in retirement? Turns out the need for financial knowledge doesn’t disappear with age. Research shows that many adults could use a better financial education foundation too. According to the U.S. Financial Literacy and Education Commission, only one-third of adults feel comfortable answering basic financial literacy questions addressing fundamental financial concepts like mortgages, interest rates, inflation and risk. Likewise, research conducted by the National Financial Educator Council poll found that over 20% of Americans felt like they did not have anyone they trusted when they had a question about finance. Given these statistics, it’s not surprising that more than half of American adults feel anxious when thinking about personal finances.
Like Aliche, the Alliance for Lifetime Income recognizes that financial knowledge is more essential than ever before. Among the many financial education resources available through its website is a newly-released second edition of the Annuities Language Glossary, an easy-to-understand resource to help make the language of annuities simpler and more transparent. Annuities can be a powerful financial product for creating retirement security by providing a source of protected income. By making this free guide available, the Alliance hopes to improve accessibility, bring greater clarity to retirement income planning and annuities, and help Americans make better informed financial decisions.