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July 09, 2014 at 12:56 PM
Education matters.
AARP Foundation has found that a well-designed, specifically targeted educational program can help low-income older adults who face unique challenges in juggling their low savings rates, high debt loads and weak job prospects.
AARP recently reported on a financial capability curriculum targeted to the 50+ age group the foundation designed in collaboration with Charles Schwab Foundation and disseminated to 11 organizations nationwide for implementation.
The report evaluated the effects of the training by comparing behaviors relating to financial topics before and after participation in the class, and by determining whether desired financial behaviors increased after participation.
Results showed that whereas only 42% of participants had at least one financial goal at the start of the program, 63% reported having at least one after six months.
This then translated into behaviors, AARP found. The rate of those reporting spending more than they earned fell by a third, and 35% reported paying down debt by the six-month follow up.
Participants also engaged in such positive actions as tracking spending, savings and credit, and avoiding potentially negative actions, such as overdrawing accounts.
Life at the Margins
Approximately 2,775 people participated in classes offered from September 2012 through December 2013.
AARP made course materials available in English, Spanish and Chinese, important for targeting those most in need of information, it said.
About half of those who started the program had less than $10,000 in retirement savings, and about two-thirds had less than that amount in non-retirement savings.
Two-thirds had incomes below $35,000, compared with the 2012 median income of $51,000.
