The following is reprint of an article published in Plan Sponsor Magazine. Lisa Buffington, Retirement Advisor Member is featured.

“We need to help Californians prepare for their financial futures as early as possible,” said Newsom in a statement. “Saving for the future, making investments, and spending wisely are lifelong skills that young adults need to learn before they start their careers, not after.”

Lisa Buffington, vice president of retirement services at Marsh McLennan Agency New England, said California adding financial literacy as a requirement to graduate high school is “great,” but the mandate will only be effective if the state provides teachers resources to support executing the curriculum.   

“The implementation [and] the roadway for getting the programs up and running is a long one, so there’s a lot of work we can do to support efforts in the meantime,” she says.

Research by the American College of Financial Services published earlier this year found many retirees do not understand the concepts of retirement income and longevity risk. Research by the Government Accountability Office in 2023 found that improved financial literacy could be key to closing the country’s racial wealth and retirement savings gaps.

There so many ways to volunteer other than by committing to a full day. Junior Achievement for example, has other programs that ask for a commitment of one hour per week for 6-8 weeks. So many ways for the community to get involved in this very important initiative… driving financial awareness for our future generations of leaders.

Source: ngpf

 

Next Gen Personal Finance reports that the number of states requiring a stand-alone personal finance course for all high schoolers reached 26 this year, up from eight in 2020.

Buffington is “encouraged” by states adding financial literacy education, but she also calls upon asset management, investing and retirement industry leaders to help. Marshaling professional expertise and resources will support and prepare teachers.

Buffington recommends using resources from the Retirement Advisor Council—a consortium of independent financial advisers that includes product providers and third-party administrators—and collaboration to develop the program, called FinLitFuture$.

“We’re pointing to a couple of vetted curriculums that … we know are being leveraged in schools,” she adds. “They’re K through 12, all the resources are available in English and Spanish, [and] all the resources are broken down across all the major topics that would represent a robust financial literacy program.”

Additional nonprofits favored by Buffington, offering resources are the Securities Industry and Financial Markets Association and Next Gen Personal Finance.  

State programs like California’s should be designed to instruct students, supporting individuals to become savvy retirement plan participants at work and to elevate their retirement readiness, says Buffington.

“Our ability to influence stronger retirement outcomes starts with our ability to bring future generations into the workforce already on solid footing from a financial literacy standpoint,” she explains.

State programs requiring basic financial literacy are “moving the needle in a positive way [by] impacting individuals retirement readiness; however, we’re still faced with some significant hurdles in terms of people entering the workplace not necessarily in a savings mindset,” she adds.

California’s move is “significant, and I hope it is a signal for other states as well,” adds Annamaria Lusardi, a senior fellow at the Stanford Graduate School of Business and founder of the Global Financial Literacy Excellence Center.

Pennsylvania and Wisconsin added financial literacy requirements for high school graduation in December 2023, according to Lusardi.

Link to original article is HERE