Investopedia and American Century Investments wanted to spread the word about financial planning while also learning about the financial fitness of the typical American consumer, so top executives from each firm plus licensed reps of American Century embarked on a bus tour across much of the Midwest last month.
The Financial Coach, a 45-foot-long tour bus, stopped in six cities in five states, targeting local events attracting big crowds, such as the Chicago marathon, Indiana University Homecoming and Financial Planning Association annual meeting, in Nashville, Tennessee.
What its riders found after talking with thousands of people, including more than 2,200 who took a three-question financial quiz, was how little people know about financial markets, investing and saving for retirement even though across generations they said retirement planning was their number one financial issue. Over 50%, for example, didn’t know the definition of a bull market or that they should have saved for an emergency fund. Those under 40 were also concerned about paying off their student loans.
Despite the focus on retirement, many people had no idea about how to calculate how much they need to save for retirement or the size of the company match for their 401(k) plan.
“Many know they have a 401(k) match but they don’t know the details about it,” said CEO David Siegel of Investopedia, who was on the tour.