Financial Literacy in These Times

Financial Literacy in These Times

AARP Member Event: Vegas@50+Friday, October 23, 2009

DISCUSSION DRAFT 11-09

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Welcome to Your Financial Future

Moderator: Mary Grate-Pylos add preferred title

Panelists: Rocky Egusquizaadd preferred title

Ouida Williams add preferred title

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Where do I go from here?

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How do I more than “just get by?”

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How do I get out of debt?

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Where can we find reliable information?

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Where do I start?

Take control of your financial future…

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How Much do you Know About Managing your Money?

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True or False?

Question #1: The first step in good personal financial management is working out a budget.

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False

Before you put together a budget, you first need to fully understand your financial situation and goals.

Starting the financial planning process with a budget is like starting a diet without adequate preparation and advice.

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True or False?

Question #2: Social Security is able to provide most working women with enough money for a comfortable retirement.

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False

Social Security was never intended to provide for all of your retirement needs. It must be supplemented with pensions, savings and investment funds.

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True or False?

Question #3: The best way to generate sufficient long-term retirement funds is to focus on conservative investment risks such as bonds.

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False

Focusing all of your investments in low-risk/low-return bonds is unlikely to generate sufficient funds for an adequate retirement nest egg.

The key is to buy a diversified range of stocks and bonds that will grow over time but also let you ride out the peaks and valleys of the stock market.

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True or False?

Question #4: Compared with men, women face unique financial challenges.

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TrueIn America today, women still: > Earn less than men> Live longer; must save more> More likely to be single parents

and live alone in adult years> More likely to have caregiving

responsibilities> Suffer disproportionate impact of

disabilities, job loss, divorce, widowhood and the recession

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What does this mean for women?

> Less budget flexibility> Less money for savings and investments> Lower social security payments> Lower or no pension> Fewer investments in retirement plans> Targeted money management plan> Less financial security at all life stages

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Growing Hispanic Community: New Financial Challenges

The time for action to improve financial security for Latina women is now:

> By 2050, the White, non-Hispanic population will fall just slightly below half of the U.S. overall population.

> The Hispanic 50+ population is expected to more than double from 8 percent to 19 percent.

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Common Financial Misperceptions

> Approaching the wrong people for financial advice> Being embarrassed to ask questions> Financing items without understanding the implications> Co-signing loans for family members with bad credit> Believing that certain employer-sponsored investments (e.g.,

401K) means the company will take their money.

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Other Challenges for the Latino Community

There are often structural barriers such as lack of bilingual, bicultural staff and appropriate materials at financial institutions that are relevant to the Latino community.

Brand to add graphic

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Death of a Spouse?

How Do You Deal with . . .

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High Health Care Expenses?

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Credit Card Problems?

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Unexpected Costs?

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Hidden Debts?

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Too Little Savings?

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Too Little Time?

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Financial Challenges for the African-American Community

> Let’s talk about on Monday – my concern here is that we appropriately focus in on the unique challenges for African-American population, but do not over-generalize. Would love input on how to structure this.

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Financial Challenges for African-American Women

Add stats:

Why not get started today?

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AARP Foundation has tools that can help.

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10 Curriculum Subject Areas

> Managing Money> Credit Cards> Installment Loans and Mortgages> Retirement Planning> Investment Planning> Home and Auto Insurance> Health Insurance> Life Insurance> Achieving your Financial Goals> Estate Planning

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1. Managing Your Money

> Money management basics> Understanding women’s unique

financial challenges> Measuring assets and net worth> Developing a cash-flow statement

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2. Making Credit Cards Work for You

> Advantages and risks > Trouble warning signs> How credit cards work> How to manage credit cards effectively

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3. Installment Loans and Mortgages

> Types of loans and mortgages> How they work> How to keep track of credit ratings> Steps in buying a home

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4. Retirement Planning

> How much should you save?> Saving early vs. saving late> Social Security benefits> Types of savings plans> How to build your retirement nest egg

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5. Investment Planning

> Power of compound interest> Stocks vs. bonds> Evaluating investment risks

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6. Home and Auto Insurance

> What types of losses should be covered?

> Types of insurance policies> What you can do to save money

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7. Health Insurance

> Types of health plans> Income lost due to illness or

accident> Medicare and Medicaid> Long-term care and disability

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8. Life Insurance

> When do you need life insurance?

> How much is needed?> Types of life insurance policies

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9. Achieving Financial Goals

> Where do you want to go?> Roadmap for reaching your goals> Practical thoughts about managing

money> Developing a cash-flow plan

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10. Estate Planning

> Wills> Trusts> Probate> Power of Attorney

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Tools that fit your life. . .

at your pace.

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Get started now by:

> Taking Women’s Financial Basics for Life at your local community college;

> Sharing Women’s Financial Literacy Program information with friends and local community groups;

> Email us at womensfinance@aarp.org

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Money Management Tools that Last a Lifetime

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Invest in yourself and your financial future.

For more information:

AARP Foundation’sWomen’s Literacy Program:

womensfinance@aarp.org