Protecting your assets allows you to be far more independent, whether that independence involves having a choice about where you live or what kind of care you’ll receive, it’s a level of independence that can’t be found if you have to count on others to provide it. Medicaid, for instance, will provide shelter and long-term care but it is not concerned with your quality of life. It’s important to understand that the kind of literacy being advocated for here isn’t the kind you would need to have to become a financial advisor. It’s more about how having an awareness on decisions such as how Social Security benefits, debt and savings will affect your life for years to come and then deciding whether you need to hire someone to help you achieve your financial goals.
If you want to have greater wealth, make a point to learn more about finances. That’s the findings of a study out of the University of Massachusetts. The study looked at data from over 1,500 older adults and found that those with advanced financial literacy levels including familiarity with stock market investments and investment risks had a higher level of wealth accumulation—to the tune of $71,187 more than those with weak financial literacy. That might sound like the benefit was in building wealth but the researcher found that one of its chief benefits was in keeping those assets once they were built. This is vital since older adults are more easily scammed or make poor financial decision than their younger cohorts. Joosuk Sebastian Chae, the graduate student who presented the findings from the study mentioned above at the Gerontological Society of America’s annual meeting pointed out that poor decisions made later in life are far more consequential since you may not have time to correct for the mistake.
As the nation moves away from defined benefits and pensions, adults need to build upon their financial literacy. A few websites that can help do that include:
- Myretirementpaycheck.org-this website from the National Endowment for Financial Education works to educate ordinary Americans about a broad range of financial topic to empower them to make positive and sound financial decisions.
- Mymoney.gov-a website chartered by the Federal Financial Literacy and Education Commission to strengthen financial capability and increase access to financial services for all Americans.
- 360financialliteracy.org-a volunteer effort by the nation’s Certified Public Accountants to help Americans understand and develop money management skills.
- KhanAcademy.org-the mission of this site is to provide a free, world-class education for anyone, anywhere. They’ve partnered with NASA, The Museum of Modern Art, The California Academy of Sciences and MIT to offer specialized content. You can learn about math, science, economics and finance and the list goes on.
- Financiallit.org-a nonprofit organization whose mission is to promote effective financial education and counseling. The site offers a laundry list of downloadable forms and interactive worksheets to assist with budgeting and personal finance management.
Financial literacy is a critical life skill…nevermore so than now as so many of us enter our retirement or at least our retirement years. We’re likely to live longer than any other generation before us and we’ll do so for a much longer period of time of chronic illness or disability. While it’s true that many retirees have already made some of the most important financial decisions and will either reap the rewards or suffer the consequences of those decisions for the remainder of their years, it’s never too late to begin looking at things you can do differently now to help the rest of your years be as financially stable as possible.
