Why are so many Americans unprepared for retirement? One possible reason is that they simply do not understand basic financial and retirement topics.
In a study on financial literacy, LIMRA asked 2,000 Americans 10 multiple choice and true/false. More than one-third (36 percent) answered less than half of the questions correctly and only 12 percent answered nine or more of the questions correctly.
“As Americans are required to take greater responsibility for their retirement saving, the issue of financial literacy becomes increasingly important,” said Alison Salka, corporate vice president and director LIMRA Retirement Research.
Based on the results, the majority of Americans (52 percent) have a medium level understanding of financial matters. More than one-quarter of Americans (27 percent) have a high level of financial understanding while 21 percent have a low level.