It’s not surprising that National Retirement Security Month occurs in the same month as Halloween.
Frightening figures about Americans’ retirement insecurity lurk around every corner. And some of the scariest stats revolve around declining financial literacy.
Financial literacy rates in the United States have been falling for more than a decade. According to a report by the TIAA Institute and George Washington University’s Global Financial Literacy Excellence Center, fewer than one-in-eight adults have strong longevity literacy. Nearly 1/3 have weak longevity literacy and do not understand the retirement planning landscape for 65-year-olds. Furthermore, only 35% of Americans are aware of a retiree’s average lifespan.
These figures are foreboding because people with lower financial literacy are far less likely to have planned for their retirement savings needs (29% vs. 52%) or to have opened a retirement account (43% vs. 70%).
Moreover, a Wharton study found that more than one-third of financial inequality in the United States could be accounted for by the differences in financial literacy.
Still, as troubling as those figures are, there’s no need to be scared. The life insurance industry strongly believes that all Americans – regardless of their race, gender, job or age – deserve an equal opportunity to secure financial certainty for their family. And the foundation for financial certainty begins with financial education.
Life insurers have a deep-seated conviction to improve financial education across the nation, including through our partnership with Junior Achievement USA (JA) and its local chapters.
More than 3.3 million students in all 50 states participate in JA programs, which teach young people to make intelligent academic and financial choices that will lead to a brighter future. It’s no trick: JA alums are more likely to have an extremely fulfilling career, achieve financial independence, and save for retirement.
To highlight JA’s important work, we bring together Members of Congress and JA students from their home districts to discuss about the importance of financial education, including this conversation between Rep. Gwen Moore (D-WI) and Elizabeth Castro from Milwaukee, Wis.
We also support JA’s financial education programs through the ACLI Capital Challenge, an annual road race in Washington D.C. that benefits JA and features participants from the three branches of the federal government and the media. This year’s race raised $150,000 for JA.
Our backing of Junior Achievement and its financial education initiatives will help more young people learn what to do so they can live confidently through retirement with financial peace of mind.
David Nielsen is Senior Director, Strategic Content/IMPACT at the American Council of Life Insurers (ACLI). His responsibilities include IMPACT and other ACLI publications, notably News Now & News Now International. A former bank examiner, business analyst and journalist, he joined ACLI in 2013.
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