People who have better understanding of finance are less likely to be worried about the later stages of their life, a new study has found.
It seems financial literacy - the ability to understand how money works, enables people to accumulate more assets and income during their lifetime, and so increases confidence for the years ahead, researchers said. Additionally, financial literacy seemingly engenders a greater perception for risk and enables those who have it to face off later-life’s dilemmas with ease.
The findings, from Associate Professor Yoshihiko Kadoya of Hiroshima University and Mostafa Saidur Rahim Khan of Nagoya University in Japan, stem from a study which asked people questions assessing their calculation skills, understanding of pricing behaviour, and financial securities such as bonds and stocks.
Respondents were also asked about their accumulated wealth, assets, and lifestyle - and to rate the level of anxiety they felt about life beyond 65.
Financial literacy helps shape people’s perception towards risk and uncertainty.