Teenagers deserve a little more credit. Often perceived as self-centered and short-sighted, new research implies the opposite.
The majority are actually worried about their parents’ retirement readiness, according to a study by Junior Achievement USA (JA) and AIG.
But when probed further about finances, a different stereotype seems to hold up: teens have a lot to learn. Most will even admit it.
Just under 70 percent of 13- to 18-year-old respondents said they know little or nothing about financial planning, and almost half aren’t confident they know how to plan for retirement. On average, they plan to begin contributing to a 401k or similar account at age 29.
Around a third are under the impression they’ll retire at age 60—tops. The same number said they’ll only need to have saved $5,000.
“But teens’ lack of understanding about financial and retirement planning does not translate into a lack of understanding about the imperativeness of planning. Ninety-three percent say it is important to have a financial plan for retirement, and 92 percent find value in taking a personal finance class in high school,” JA and AIG noted in the report.
And boy, do they need it.
When asked to match the terms “401k,” “annuities” and “Social Security” with their definitions, just under half were correct about 401ks, one-third about annuities and two-thirds about Social Security. Only 51 percent said they’re somewhat confident Social Security will still exist when it’s time for them to retire (but hey, many adults question the program’s lifespan, too).
“The most important message for teens is that by having a plan, and an understanding of what it means to retire well, they will be better positioned for their own retirements when that time comes. This is especially important as Americans are living longer than previous generations,” Jack Kosakowski, president and CEO of JA, said in a statement.
Jessa Claeys is a writer, editor and graphic designer.
