Financial literacy report card flags deficiency in retirement planning

"With the myriad of financial considerations affecting the lives of Canadians, ensuring that we have the necessary level of financial literacy — the knowledge, skills and confidence to make responsible financial decisions — is absolutely essential," says L. Jacques Ménard, chairman of BMO Nesbitt Burns and president of BMO Financial Group Quebec, who served as vice-chair for the Canadian Task Force on Financial Literacy. "Financial literacy is an issue affecting Canadians at every stage of life and creating awareness is key, not only during [Canada's] Financial Literacy Month, but all year."

The report observes that Canadians know more about healthy diets than investing:

• Eighty-two percent feel knowledgeable about healthy diets, while 56 percent feel knowledgeable about investing and only 10 percent feel very knowledgeable.
• Knowledge of other aspects of financial management fared much better than investing, with 88 percent feeling knowledgeable about budgeting household expenses and managing debt.

Retirement planning and educating the next generation on personal finance remain shortfalls:

• Despite believing they will need close to one million dollars to retire (CDN $965,913), fewer than half of Canadian households have a financial plan (43 percent) that would help them get there.
• The majority of Canadians would rather talk to their children about the facts of life than they would about their financial situation (59 percent vs. 41 percent respectively).
• Financial institutions lead as source of financial knowledge:
• Financial institutions continue to be the best source of financial information, with 80 percent of respondents stating they do a good job providing advice on personal finance matters.
• About half (49 percent) of Canadians say the media adequately provides financial information, followed by government bodies (45 percent) and the education system (38 percent).