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How Much Money Did You Lose in 2024 Due to Financial Illiteracy?

by BlogFinancial LiteracyWealth

Stop! Before you read this article, take a guess at how much money you lost (and didn’t save or invest) last year due to your own financial illiteracy? Here at Her Retirement, we want to take our own survey on this question so feel free to go to this link and let us know the number, and then feel free to read the rest of this article.

Take the ONE Question Survey here

During the past year (2024), about how much money do you think you and other people, on average, lost because you/they lacked knowledge about personal finances? It may be difficult to pinpoint exactly, but a new survey sheds light on the high cost of financial illiteracy in America. According to the National Financial Educators Council (NFEC), Americans lost an estimated $1,015 per person on average in 2024 due to not having the financial knowledge to manage their personal finances effectively.

The survey, which was conducted between December 26th and December 30th, 2024, asked 1,200 U.S. residents from across the country to estimate how much money they lost because they lacked financial literacy. The results are both startling and eye-opening.

Key Findings: The High Cost of Financial Illiteracy

The respondents’ answers revealed that financial illiteracy was costly. On average, participants believed they had lost $1,015 throughout the year due to decisions stemming from a lack of financial knowledge. If we apply this average loss to the entire U.S. adult population of approximately 240 million, the total cost of financial illiteracy in America in 2024 amounts to more than $243 billion.

This staggering figure emphasizes the profound impact that a lack of financial education can have on individuals and the economy as a whole. From missed investment opportunities and unoptimized budgeting to costly financial mistakes, the consequences of not understanding personal finance can be far-reaching.

The Methodology Behind the Survey

The poll was conducted using Organic Sampling, a methodology designed to ensure a diverse and representative sample. By utilizing Random Device Engagement (RDE), this approach delivers a framework of randomized digital interactions with participants, reducing bias and helping to achieve a more accurate reflection of the financial challenges faced by Americans.

Why Financial Education Matters

These findings underscore the importance of financial literacy. In an increasingly complex financial world, it’s essential for individuals to understand the basics of budgeting, saving, investing, and planning for retirement. Whether you’re managing everyday expenses or preparing for long-term financial goals, having the right knowledge can make all the difference in securing a healthier financial future.

Tech-Powered Platforms for Financial Literacy and Retirement Wellness

As the need for financial literacy grows, platforms like Her Retirement and Retirement Solved are stepping up to provide essential education and support for different groups of people.

Her Retirement focuses specifically on empowering single, divorced, and widowed women, helping them navigate the complexities of retirement planning with a comprehensive approach and software to financial wellness. The platform offers coaching, courses, and a community for women to take charge of their financial futures and ensure a secure and fulfilling retirement.

On the other hand, Retirement Solved is tailored to accomplished individuals, professionals, small business owners, and employers who want to implement retirement wellness programs for their employees. By addressing the needs of both individuals and organizations, Retirement Solved helps ensure that everyone is well-prepared for a financially stable and rewarding retirement.

Both platforms emphasize the importance of financial education, retirement planning, and wellness, empowering individuals and organizations to make informed decisions and avoid the costly consequences of financial illiteracy.

If you’d like some help improving your literacy or you’d like to find out more about Retirement Solved @Work employee retirement wellness, go to: Employers – Retirement Solved

Email me at: lynnt@herretirement.com with any questions or help.

Her Retirement Rolls Out New Corporate Financial Wellness Program

by Corporate Financial WellnessRetirement Education

We’re excited to announce our new financial and retirement wellness program for employers.

Our mission is simple…to empower your employees, and make preparing for retirement easier and living in retirement more prosperous. We want to take the work and worry off your employee’s plates with our Her Retirement approach to retirement planning, regardless of whether you’re employee is 35 or 65 and getting ready to retire.

Our workplace financial wellness solutions include onsite Lunch-n-Learns where we come into your facility and teach a number of no cost financial and retirement workshops. We then offer older attendees a complimentary “Am I Ready” Assessment to help them determine when they can retire and if they will have enough income to last throughout retirement.  For younger employees, we offer a fee-based 401(k) assessment that helps them determine:

  • Am I putting enough money away for retirement?
  • Do I have the right investments in my plan?
  • Do I have the proper allocations?
  • What will be my best withdrawal strategy to minimize the effect of taxes?

In addition to this assessment, we offer a number of other assessments and full planning services. This is a great value added service to offer your workforce.  Consider a few facts below and then contact us about bringing our program to your organization.

“More than 88 million employees are responsible for managing their own retirement assets. However, it’s estimated that these same employees lose $100 billion every year due to investment mistakes!”(1)

The Society for Human Resource Management (SHRM) noted in its 2016 Employee Benefits survey report that 61 percent of HR professionals polled last year described their employees’ financial health as no better than “fair,” and 17 percent reported their employees were “not at all financially literate.”

Other research highlights why these benefits are needed. PricewaterhouseCooper’s (PwC’s) 2016 Employee Financial Wellness Survey, with responses from 1,600 full-time employees, showed that:

  • 52 percent of workers overall are stressed about their finances. And the younger the worker, the more likely he or she is to be worried: 64 percent of Millennials said they are stressed about their finances.
  • 46 percent of workers spend three or more hours during the workweek dealing with or thinking about financial issues.
  • 45 percent said their finance-related stress had increased over the last 12 months.

“The benefits to employers of addressing employee financial stress are significant. Financial wellness programs drive engagement, productivity and success, and they also engender increased loyalty and connection.”

Learn more about Her Retirement’s workplace solutions here

1Help in Defined Contribution Plans – 2006 Through 2012, Financial Engines and Aon Hewitt, May 2014.