May 7, 2009

Apparently, boomers can't count

Little late to the party, but we'll take it where we can get it. Washington Post columnist David Ignatius takes on boomer retirement planning (or the lack thereof) in today's paper. Anytime it makes its way to the consumer press we're happy. And the fact that someone who normally comments on foreign affairs felt the need to opine on this domestic issue gives it added weight (had an interesting exchange with Ignatius about Iran a few years back after a couple of beers. Let's just say we didn't agree, and I think I completely horrified him). So what did he find? Surprise -- boomers are woefully underprepared. Key paragraph:

"How bad are baby boomers at financial planning? Extremely bad, according to Annamaria Lusardi and Olivia Mitchell of the National Bureau of Economic Research. They found that more than one-quarter of boomer households thought "hardly at all" about retirement and that financial literacy among boomers was 'alarmingly low.' Half could not do a simple math calculation (divide $2 million by five) and fewer than 20 percent could calculate compound interest. The NBER researchers also found that, as of 2004, the typical boomer household was holding nearly half its wealth in the form of housing equity. Uh-oh."

Uh-oh might be a bit mild. Read the whole thing here and share it with as many people as possible.

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