Americans approaching retirement-age may be ready to kick back and enjoy their golden years, but the vast majority of them cannot pass a basic financial literacy exam.
Nearly three-quarters of Americans in retirement-age failed a financial literacy exam on how to make their savings last through retirement, according to an online survey conducted by The American College of Financial Services. The most troubling finding from the survey: Americans ages 60 to 75 with at least $100,00 in total assets appear to be significantly under prepared for many decisions facing them in retirement, like long-term care expenses and investment strategies.
Respondents were asked questions like what is the best time for a retiree to collect Social Security benefits and other key choices retirees will face during retirement.
The survey revealed a few demographic divides among gender, socio-economic status and education levels. Some 35 percent of men who took the survey passed compared to 17 percent of women. Wealthier Americans scored much better, on average, than those with lower levels of savings. Forty-nine percent of respondents with over a $1 million in savings passed, while only 20 percent of respondents with under $1 million made a passing grade.
“More and more Americans are retiring but so few understand basic facts and strategies when it comes to ensuring that their retirement is a comfortable one. The results of this survey are alarming and a stark reminder of the need to be prepared for the decades in retirement when you are not earning a steady stream of income,” Retirement Income Program Co-Director at The American College of Financial Services, David Littell, said in a statement.
Americans nearing retirement have an average of just $17,000 in their 401(k) plans. (RELATED: Average American Couple Has Just $5,000 Saved For Retirement)
The median working-age American couple has just $5,000 saved for retirement, a figure that does not bode well for the long-run financial stability of the nation.
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