Retirement Readiness 3

Saving, investing, and planning for retirement can be an exercise in futility if an individual lacks the know-how that is required to be successful. While many people may not have the desire or wherewithal to become retirement experts themselves, they must be able to recognize and rely on sound advice.

Key to having a meaningful discussion with an advisor and having the confidence to make an informed decision is a baseline level of financial literacy, which unfortunately is lacking among people preparing for retirement.

Only 30 percent were able to answer correctly the ‘Big Three’ financial literacy questions developed by Drs. Annamaria Lusardi and Olivia S. Mitchell, which are designed to test an understanding of compound interest, the impact of inflation, and risk diversification. The ‘Big Three’ financial literacy

Health has emerged as the new frontier in retirement security. The miracles of modern science and improvements in nutrition in recent decades have made longer life expectancy the norm rather than the exception.

Inspiring people to make the link between health, wealth and well-being as they age is critical to ensure future retirement preparedness. While most people consider themselves to be in ‘good’ or ‘excellent’ health today, that is unlikely to remain the case for the rest of their lives because many are failing to take the necessary steps to maintain good health.

There is a clear correlation between workers who take steps to maintain good health and a person’s sense of retirement readiness. Workers who engage in all five of the five healthy behaviors identified in the survey achieve an ARRI score of 7.4 – a medium score – compared to those who engaged in none of the behaviors scoring 4.6 – a low score.

One of the key findings of this year’s survey is the widespread desire to remain in and enjoy one’s own home in retirement. Making this possible could involve relatively minor home modifications to help people live independently.

Seventy percent of respondents say that remaining in their own home is either ‘extremely’ or ‘very’ important to them as they grow older.

Globally, the most commonly cited feature or device is bathroom modifications (43 percent) followed by home security systems (39 percent) and age-friendly furniture and panic buttons to call emergency services (both 37 percent).