March 11, 2024
The American College of Financial Services recently unveiled the findings of its 2023 Retirement Income Literacy Study at a media event in New York City.
The study, which is the fourth iteration of The College's Retirement Income Literacy Study, reveals concerning gaps in retirement knowledge among older Americans. On average, participants scored only 31% on a retirement literacy quiz, highlighting a lack of actionable retirement knowledge.
Dr. Kaylee Ranck, Director of College Research, led the efforts to launch this project on behalf of the American College Center for Women in Financial Services and presented the findings at the event. The study underscores the direct relationship between financial literacy and factors such as asset levels. Respondents with assets exceeding $1.5 million scored twice as high as those with less than $100,000 (50% vs. 25%), indicating that wealthier individuals tend to have a better understanding of retirement planning.
The study also emphasizes the crucial role of financial professionals in educating clients. Advised respondents, those who work with financial advisors, demonstrated higher retirement income literacy and better outcomes compared to their non-advised peers. This finding highlights the importance of professional guidance in navigating the complexities of retirement planning.
The timing of the study is particularly relevant as the United States approaches a demographic shift known as the "Graying of America." The Baby Boomer generation is reaching retirement age, with an estimated 12,000 individuals retiring every day. As the median age of Americans increases, planning for longer, well-lived lives become increasingly important.
The media event in New York City, attended by journalists from leading trade publications and industry experts, served as a platform to disseminate these findings. The Retirement Income Literacy Study not only sheds light on the current state of retirement literacy, but also points to the need for a concerted effort to improve financial education and planning.
In addition to the broader findings, the Center for Women in Financial Services is set to launch a specialized segment of the data focusing on retirement income planning for women. This initiative aims to highlight the distinct outcomes and knowledge levels of women regarding retirement income. The continued examination of the survey results, including this targeted analysis, is essential in providing valuable insights into the state of retirement planning and financial literacy in the United States. As the research progresses, it will remain instrumental in shaping the conversation around retirement readiness and financial education, with a particular emphasis on addressing the needs of diverse demographics.
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