While Americans recognize that becoming more financially savvy strengthens their chances of saving more for retirement, relatively few are taking steps to improve their understanding of financial matters, according the “Financial Resources and Engagement Study,” released recently by Genworth Financial Inc. Financial and educational experts have highlighted the need before for higher levels of financial literacy (see “The Importance of Financial Literacy”).
The study finds three out of five adults believe there is a correlation between financial literacy and retirement readiness. However, it also reveals that less than half (46%) of these same adults actively seek out financial knowledge. The reasons are the complexity of financial products (45%), as well as a lack of time (37%) and uncertainty about how to get started (18%).
“It is not lack of access to information that is holding many Americans back from improving their understanding of financial matters,” says Barbara Nusbaum, a New York-based psychologist and money coach. “Rather, it is a feeling of being overwhelmed by the complexity of financial products and by the amount of time perceived as necessary to improve one’s financial knowledge. 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.”
Genworth’s research also indicates that women are significantly less likely than men to actively seek out financial knowledge. While 61% of men surveyed state they actively seek to deepen their understanding of financial matters, only 34% of women do so. Nearly half (48%) of women say the biggest roadblock to learning more about financial matters is the complexity of financial products, compared with just 39% for men.
Regardless of gender, men and women view a one-on-one meeting with a financial adviser as the way they would most like to educate themselves about financial matters and products, the study finds. Forty-three percent of those surveyed would turn first to an adviser for financial education.
The study was conducted in collaboration with J&K Solutions LLC. The data was collected from an online survey this past November. Respondents include 1,016 adults from across the U.S., ages 25 and older, with household incomes of $50,000 or higher.
More information about the study can be found here.