Schools are beginning to teach students about finances,
and many Americans feel the trend is long overdue.
Eighty-seven percent believe
finance should be taught in schools, according to a survey from RBC Wealth
Management-U.S. and City National Bank.
Of those in favor of incorporating financial literacy into the
classroom, 15% think the instruction should begin in elementary school. The
rest, 72%, say it should be taught in middle and high school.
“Having a basic understanding of how money, investing and
our broader financial system works is critical in our society today,” says Tom
Sagissor, president of RBC Wealth Management-U.S. “There is a growing
realization, particularly in the wake of the last financial crisis, that many
people don’t understand budgeting, investing or how simple financial products
like loans work. That puts them at a disadvantage not only during their working
years, but as they begin to contemplate retirement.”
Thirty-eight percent of Baby Boomers and 37% of Gen Xers said no one taught
them about investing. However, that falls to only 29% of Millennials, with 22%
saying they learned at least the basics about investing in school.
Parents also report taking a more proactive stance on
teaching their children about money. Thirty-seven percent of parents with
children over the age of 16 said they have done a very good job of teaching
their children about money. To help parents in their quest to teach their
children, RBC Wealth Management-U.S. has created a paper, “Seven Ways to Raise Money-Savvy Kids.”
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Worries About Aging Cut Both Ways for Clients and Families
Parents are worried about their independence as they age;
kids are worried about their aging parents’ quality of life; parents are worried
about their kids’ health and finances; and around it goes.
New survey data released by Hartford Funds shows Americans overwhelmingly
are worried about becoming a financial burden on their family members as they
age.
Directly tied to this, Americans widely feel that do not
have enough money saved to pay their own way during life after work, especially
when it comes to maintaining one’s current standard of living. These are pretty well-established findings, notes John Diehl,
senior vice president for Hartford Funds, but what is more surprising is just
how many adult children in the survey said they are “most worried about their
aging parents maintaining a high quality of life.”
“Finances are of course important, but they can be disproportionate
compared to qualitative issues like care-giving and maintaining a social network
of family and friends in retirement,” Diehl says. “Advisers need to be thinking
about these qualitative, human-centric considerations when they approach
discussions about aging with their clients.”
While “simply running out of money” and “becoming a
financial burden to children” are the top concerns associated with aging
identified overall by survey participants, younger respondents between ages 35
and 45 are particularly worried about these issues. Nearly half (45%)
cited these concerns, compared with one-third of their older counterparts.
Additional disparities emerged on the topic when looking at subsets according to income, according to Hartford Funds.
“Specifically, those with incomes between $75,000 and
$100,000 are more concerned about these issues than any other income group,”
the survey findings show. “In fact, they are nearly twice as likely to worry
about being a financial burden on children or running out of money as
respondents who make $50,000 to $74,999 annually, at 50% and 29%, respectively.
Many advisers and their clients are taking action to meet
these concerns, the survey findings suggest. For example, sizable groups of clients
are making or have made “strategic living arrangements, including physically
moving to accommodate their lifestyles.” Others “are setting themselves up to
be accessible for care-giving by moving closer to children or into an aging care
home or community.”
NEXT: Quality of life
is not just a money issue
The survey results show women, in particular, feel pressed
to make arrangements for either giving or receiving care later in life, outnumbering men nearly
two-to-one in terms of taking progressive steps today to address these worries.
“Americans’ general top concern for their aging parents is
tied to quality of life issues,” Diehl says. “A quarter of respondents feel
that having a home their parents are physically able to maintain and easily
move around in is most important.”
Others are most concerned about their parents maintaining a
social network of friends and family (20%).
“Interestingly, respondents ages 35 to 44 were much more
likely than their older counterparts to be concerned about their parents’ ability
to maintain a social network, at 28% versus 17%,” according to the survey. “In
general, Americans are also addressing the concerns they have about their aging
parents by either moving closer to their parents or moving their parents closer
to them.”
In particular, 35- to 44-year-olds were more likely than
older respondents to move closer to their parents or have parents move closer
to them, the survey shows.
“Moving to be closer to your parents or moving them closer
to you is a decision with enormous financial and quality of life implications,
for both parties,” Diehl warns. “It’s important to proactively communicate with
family about these decisions and seek advice from a trusted source.”
It’s high time for advisers to start pushing harder on these
points, Diehl concludes. The survey revealed that only a small number of
clients “are initiating conversations with their loved ones about their own
and their aging parents’ intentions as they age, an underwhelming 14% and 12%,
respectively.”