A new study suggests that retirement living seniors need to brush up on their financial knowledge if they hope to be prepared for an uncertain retirement future.
According to a recent article in the Wall Street Journal, a group or researchers from Texas Tech University say as people age, their knowledge of personal finance decreases by about two per cent every year, but, ironically, they also become increasingly confident in their knowledge as they age.
“If you look at the questions, these are things that you need to know to navigate financial markets,” Michael Finke, a Texas Tech professor, and one of the authors of the study, told the news source. “A lot of people are not able to effectively do that, even when they are at full capacity... It's amazing what people don't know.”
Finke and his colleagues created a test in order to evaluate financial knowledge, and they found that 60 year-olds answered 59% of the questions correctly, while that number fell to only 30% among 80 year-olds.
Many seniors, whether they live at home or in assisted living communities, don’t have the financial knowledge that they need, and Finke told the media outlet that to best protect themselves, seniors need to make their financial decisions more passive as they age.