Carrie Schwab-Pomerantz is a certified financial planner; she’s been an advisor to two White House administrations; and she’s the daughter of legendary investor Charles R. Schwab.
Safe to say, she has had a solid financial education.
Her mission now is to improve financial literacy around the country. “I'm a big believer in the whole notion that we live in a world of doing it ourselves and so we have to be really engaged in our finances and start early on,” she said on Yahoo Finance's YFi PM. Education ensures “financial security when you get older."
Schwab-Pomerantz is president of the Charles Schwab Foundation, which has studied the issue of financial literacy and found that young people, especially young women, are falling behind.
The foundation starts young: one of their partners is with the Boys & Girls Club of America. With the club, the foundation has created a financial education program that it says has been completed by nearly one million teens. The foundation also does work with DonorsChoose.org to support financial education in classrooms, as well as with the AARP.
Schwab-Pomerantz says that if young people "save, say, $24,000 for 25 years at a 7% rate of return, you have about $1.7 million.” (While it might be a challenge for many people to save $24,000 each year, even saving about $15,000 each year would make the saver into a millionaire after 25 years. And other experts have various approaches to saving for retirement.)
She adds: “that’s where the real money comes through is by starting to save early on."
She notes that Social Security will likely remain an important supplement for Americans in retirement. (Over the past couple of decades, a majority of retirees have consistently reported that Social Security is a major source of their own retirement income, according to a 2017 Gallup poll.) But if people “are engaged in their finances early on, we don't have to worry so much about Social Security. It would be gravy for us."
Schwab-Pomerantz appeared as part of Yahoo Finance’s ongoing partnership with the Funding our Future campaign, a group of organizations advocating for increased retirement security for Americans.
Financial literacy is also an issue for Susan McManus, a professor of government at the University of South Florida. She, like Schwab-Pomerantz, advocates that financial issues be a bigger part of the core curriculum in primary and secondary schools.
“This whole situation of the economy of the country to me reflects just an inadequate economics education. It's not even been perceived as important enough to put in the curriculum of K through 12,” McManus said. “It’s one of my big pet peeves.”
Ben Werschkul is a producer for Yahoo Finance in Washington, DC.