New Retirement Survey Reveals People Globally Don’t Understand Investment Or Inflation
The comments below are an edited and abridged synopsis of an article by Tyler Durden
A new test regarding the financial literacy of people worldwide has produced alarming results. People don’t understand some of the central tenets of global monetary policy, or some of the key concepts about retirement.
The first problem was that the average investor doesn’t seem to understand the difference between a stock and a mutual fund. When asked which was the riskier financial instrument, only 45% of people knew the answer.
The average middle-class worker doesn’t seem to understand how inflation works or how it affects their purchasing ability. This may explain central banks’ obsession with manipulating it and using it as a tool to further their spending agendas.
Despite the lack of understanding, making fiscal sense remains a major concern for people heading for retirement. The survey asked participants what their biggest concerns were as they approached retirement; declining physical health and running out of money were first and second.
Despite not understanding the core principles of the government’s monetary policy, survey participants seemed sure that the government benefits offered for retirement were crucial. As the government takes with one hand (inflation), it gives with the other (spending on retirement benefits).
The reality of trends that will actually affect retirees seemed to go unnoticed, however, according to the survey.
On average, survey participants also seemed unsure of when they would actually stop working. A number of people wanted to work to 65 but had to retire early, generally for reasons of declining health or job loss.