Three out of five adults believe there is a correlation between financial literacy and retirement readiness, which begs the question: Why do less than half (46 percent) actively seek out financial knowledge? The answer, according to 45 percent of adults surveyed, is the complexity of financial products. Other roadblocks include a lack of time (37 percent) and uncertainty about how to get started (18 percent).
“It is not lack of access to information that is holding many Americans back from improving their understanding of financial matters,” said Dr. Barbara Nusbaum, a New York-based psychologist and money coach. “Rather, it is a feeling of being overwhelmed – by the complexity of financial products, by the amount of time perceived as necessary to improve one’s financial knowledge and a disconnect between financial needs and personal needs. An hour invested today in gaining the financial know-how that will make your life, family and money more secure will pay tremendous dividends over the long run.”
Gender and Financial Literacy
Genworth’s research indicated that women are significantly less likely than men to actively seek out financial knowledge. While 61 percent of men surveyed state that they actively seek to deepen their understanding of financial matters, only 34 percent of women do so. Nearly half (48 percent) of women say that the biggest roadblock for not learning more about financial matters is the complexity of financial products, compared to just 39 percent for men.
Regardless of gender, a one-on-one meeting with a financial advisor is viewed by men and women alike as the way they would most like to educate themselves on financial matters and products. Forty-three percent of those surveyed would turn first to an advisor for financial education.
A Starting Point for Financial Planning
“A financial professional can be a great educational resource and can help consumers develop a strong foundation – giving them more control over their financial futures,” said Suly Salazar-Layton, Genworth’s director of Practice Management, who helps financial professionals develop client relationships by focusing on education and communication.
“It’s a good idea to look for a financial professional who starts by asking questions and really listens,” she said. “Instead of starting by discussing products, it’s important that they ask consumers about their needs and concerns. Once the consumer’s priorities are clearly understood, together they can identify appropriate solutions to address their key financial goals.”
Dr. Nusbaum also offers a few easy tips Americans can follow to become more financially prepared:
- Make financial literacy personal. List the now, later and much-later hopes and life events you want for yourself and family.
- Speak to a financial professional who can help you reach and secure these “hope-fors”. Find a financial professional through friends, colleagues and family.
- When you speak to your financial professional, focus on your “hope-fors” and other significant life events to get advice on specific financial services and products that can get you there.
- Give yourself permission to ask questions, again and again. If you don’t understand how a financial service or product supports and secures your life, ask your financial professional to explain it until you do. Don’t be embarrassed. They want to help; that’s doing the job well.
- If it’s hard to find time, start with small, easy steps like educating yourself on financial websites.
Genworth also provides a host of tools and other resources to help close the financial literacy gap and help Americans properly plan for their financial futures, including:
- Genworth’s Let’s Talk resources offer tips for initiating conversations about retirement and planning for the future with loved ones
- Join Genworth on Facebook for tips, polls and discussions to help you keep all types of financial promises
- Use Genworth’s Cost of Care Map to help evaluate options to address the increasing cost of long term care and help protect your hard earned assets.
- To learn more about how to protect retirement money and guarantee a lifetime income, visit Genworth’s Annuity Solutions page that contains planning tools and educational videos
- Consumers can learn about different types of life insurance and access calculators to help determine how much life insurance they may need by visiting Genworth’s Life Insurance Solutions.
About the Study
Genworth’s Financial Resources and Engagement study was conducted in collaboration with J&K Solutions, LLC. The data from this omnibus study was collected from an online survey over the course of 3 days in November 2013. 1016 adults (ages 25+ with household incomes of $50,000 or higher) across the United States were surveyed providing a highly stable and reliable data source. This allows for estimates of the stated population within +/- 3% with 95% confidence, unless otherwise noted.