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Americans’ lack of financial acumen may be detrimental, quiz results suggest
With nearly three quarters of respondents failing a basic financial quiz, it’s clear that retirement financing could be problematic for future generations. Personal finance reporter Alessandra Malito examines some of the statistics from the quiz, nothing that “(a)lmost 75% of Americans in retirement age failed a retirement literacy quiz hosted by the American College of Financial Services, which asked how to make money last through their golden years.” Read her report on this issue here…
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Very few people have taken the time to understand our debt based financial system, so they do not have a good plan in place to hedge their income against inflation which has been, over the course of the last 100 years, a loss in the purchasing power of our dollar of about 97% over that time frame. The other problem I see is that retired people have a normalcy bias thinking that because things have been so good for them over their lifetimes (no wars to speak of, and pretty good standard of living even if it has been borrowed), that things will always be that way. History shows that things we take for granted now can easily disappear quickly if one of the bubbles (car loans, student loans, bond market, real estate or corporate debt) bursts. It would be wise to prepare an alternate plan.