This one great idea can make everyone better with money, older Americans say

Studies consistently show that older Americans regret many things – working too much, choosing the wrong friends, not taking care of their health, etc.

There are also frequent financial regrets, such as not having enough savings, and not investing enough for retirement.

This final regret has many reasons: Everything from the burden of school loans, housing costs, childcare and more. Similarly, most employers do not provide pensions these days, putting even more pressure on workers to fund their pensions.

Many seniors today are probably too late with their finances. But when the Social Security Administration (SSA) was asked about it, they had an idea that could help the next generation of retirees do better than they did.

This argument makes no sense: Literacy should be taught in schools. The SSA cites data showing that four-fifths of adults — 80% — wish they had been required to complete a semester or year of coursework focused on personal finance while in college. high school. He also said that 84% of those nearing retirement age (age 60+) said that “spending and budgeting” should be taught in school, and even more, 88% were believes that such studies should be a prerequisite.

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“Lifelong financial education can be a helpful tool in retirement preparation,” said Beth Bean, senior vice president, research and impact, National Endowment for Financial Education, in in a blog post about social security.

Learning financial literacy isn’t—or shouldn’t be—difficult. Some of the basics include things like creating a budget, living within your means, setting aside monthly savings, using debt wisely, and having a diversified and long-term investment perspective. There are more basics, of course.

Perhaps one of the most important things that future retirees can learn is just basic self-awareness. I know a young woman who, when she turned 18 years old or so, was given $100,000 as part of her inheritance. He immediately got out and blew it on the car. I don’t think they understand that cars depreciate by the time you drive them, and cost a ton in insurance and maintenance. If he put that 100 major, for example, the S&P 500 index SPX,
at that time it is now about $270,000. And 30 years from now when he approaches retirement? Sigh.

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The old men were right. Financial literacy is important. Indeed, with Social Security under stress — its Trust Fund is slated to run dry by 2034, leading to significant benefit cuts — educating retirees in the future, better management of their money can be a hedge against future problems.

But that’s a tall order. Only 15 states currently commit to “ensure that all high school students take a Personal Finance course for at least one month prior to graduation,” the report said. by NextGen Personal Finance (NGPF), a group dedicated to improving financial literacy. The group has set a lofty goal of ensuring that “By 2030, all American high school students will be guaranteed to take one semester of financial education before graduation.”

In the meantime, the SSA has other data worth checking out:

  • In a financial survey conducted during the COVID-19 pandemic, 85% of respondents confirmed that some part of their personal finances was causing them stress. For 31% of respondents, this concern is “having enough assets for retirement.”

  • In the same poll, 70% said they have made financial adjustments due to the COVID-19 pandemic. Of that group, 27% increased their contributions to their emergency fund, retirement savings, or savings or other investments. By comparison, 21% used emergency savings — or borrowed from a retirement fund.

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The financial stress reported by the Social Security Administration deserves more attention. While 85% of respondents reported financial stress during the pandemic, the number has undoubtedly risen today for another reason: the highest rate of inflation in the forty years, which destroyed the value of all the savings of the elderly. Simply put, when inflation rises, retirees need to draw on assets faster to survive.

Adding more pressure to seniors’ finances is the end of federal aid programs that helped Americans survive during the pandemic. The Coronavirus Aid, Relief, and Economic Security Act (CARES) authorized direct payments to individuals, large monthly rebates for families with children, and expanded benefits to unemployment for laid-off workers, but it ran out two years ago – before the cost of living increased. Equipment. For financially strapped seniors, it’s one thing or another.


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