Most Americans intend to retire ultimately, but few have the knowledge of dealing with the main challenges that often make it difficult for retirees according to a New study from the Tiaa Institute and the Center for the Perfection of Global Financial Literacy.
A study, which examines more than 3,300 Americans, found that the average adult in the United States could not answer most retirement issues. The survey respondents were asked a total of six questions ranging from the topic of long -term care to lifelong income.
On average, respondents answered only 2.2 questions or 37% of the questions. Fifteen percent of adults surveyed cannot answer any question correctly.
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Financial advisers say that lack of knowledge can create problems for Americans who want to retire. But it also presents the opportunity for planners in the wealth management industry.
“What I think the planner should do is really to focus on education and make sure the client understands things,” says Charles, Faila, the founder of Sovereign Financial Group in Stamford, Connecticut. “My job is not to say,” here is the absolute right thing, “because it is rarely so clear. But instead, it is to say, “Here is a A and B option, or maybe C, and here are the pros and cons of each of them.” And if I do my job properly, then the client, even without decades of financial experience, like me, must be able to make a decision.
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Customer training for the various options available for them is a decisive part of the work for FAELA, but he said he also did not expect customers to become experts themselves.
“I could become a plasterboard expert, but I have no interest in this, so I hire people. Like, it’s not what I want to learn,” Faila said. “All these are learned. But you have to understand, if someone comes to your office, by definition they are not … as financially literate as you are.”
Even for the people who would prefer to pay someone to deal with their financial planning, the file said that a client’s training about “why” behind certain decisions and behavior is crucial to ensuring that they adhere to the plan.
“What type of discipline will this client have if they don’t understand why they do it, right?” he said. “Education helps them do the right thing that is, stay on the course.”
In the study, approximately three -quarters of the respondents could not correctly answer the questions about long -term care and Medicare coverage. These numbers are not promising, but they can be improved among older Americans.
“I think we see a much higher level of acceptance of people who understand that they will need care. And like everything, it is guided by experience,” says Birke Sestock, a financial advisor at Moneco Advisors in Fairfield, Connecticut. “More and more people who are on the 40th, 50s, 60s, are now able to have to take care of an adult in their family … and now they go,” Well, I know this happened to Mom and Dad, so it will definitely happen to me, right? “So, the refusal I find leaves when our generations get older because people live it.”
However, customers can understand the importance of preparing for something like the needs of long -term care, but that does not mean that they are equipped with the information to do so. That’s where advisers come in, Faila said.
“I give them the options and this is an option A, B or C. So, pay for yourself, pay for it with insurance, or let the state pay it to Medicaid,” he said. “And there are, of course, the pros and cons of each of them, right? And we translate them through that they can make their decision.”
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Navigating these options can be made complicated, especially for customers who are not in perfect financial situation, Sestok said.
“If you are not in, like the General Green Zone and you are in that yellow zone where you are likely to have long -term care costs, but you probably won’t be able to enter the whole account, then I think there is a real and honest conversation about:” How do we apply long -term care insurance in your financial situation? “He said.” It’s always better to have some insurance than zero. “
Customers can certainly benefit by learning more about the opportunities available for them when it comes to something like long -term care, but few people are equipped to effectively make these related financial decisions themselves, Sestok said.
“Retirement as a whole and long -term care specifically, I don’t think this is a topic that people need to try to appreciate, unless they really take the time to learn a lot about the subject,” he said. “They should consult a professional.”
