More than three-quarters of Americans in their 50s and older say they have “little or no confidence at all” about retirement products, a new survey found.
One of the biggest drivers for this insecurity: financial jargon, according to a survey of 1,071 Americans from Unbiased, a U.K.-based personal finance platform that links consumers with financial advisers. Another reason was simply not knowing where to start, respondents said. While the survey participants were aware of products such as 401(k) plans, 403(b) plans and IRAs, fewer were familiar with annuities and defined-benefit plans.
Healthcare, unexpected risks and inflation were also top causes for concern around retirement planning, the survey found.
Financial literacy is a major roadblock to sufficient retirement planning and a sense of comfort for the future. Americans must not only be familiar with various retirement products, such as various investment accounts and strategies, but there are a host of crucial decisions to make, such as when to claim Social Security, what type of insurance to have (and how much), the best coverage for healthcare and so on.
This isn’t the first survey underscoring the barriers to proper retirement planning. While Americans understood the concepts of savings accounts, fixed-rate mortgages and 401(k) accounts, they were less confident in topics including index funds, annuities, Roth IRAs and mutual funds, another survey of more than 1,000 people from training company TheKnowledgeAcademy.com found.
Almost half of the Unbiased survey respondents said they relied on their family, friends or online searches for financial advice, and three out of 10 people said they reached out to a financial adviser. Anyone looking to work with a financial professional should do their research by vetting the adviser on sites like BrokerCheck and the SEC’s database or asking these questions.