When Reading Declines, Risk Goes Up: Why Retirees Must Stay Engaged

When Reading Declines, Risk Goes Up: Why Retirees Must Stay Engaged

Reading is a crucial skill in retirement, often overlooked. The ability to read and comprehend financial information is not a given, as statistics show. While 79% of U.S. adults are considered literate, more than half read below a sixth-grade level. The average American reads at a seventh- or eighth-grade level. This means that when financial professionals present reports, disclosures, and planning documents at a twelfth-grade or college level, a significant portion of our audience may struggle to fully engage.

Now, this is the point where some might feel discouraged and stop reading. But remember, reading is a skill that can be improved with practice and patience. So, please do not give up; continue.

This is not just a problem for children. Reading ability peaks somewhere in middle adulthood, then declines gradually with age as processing speed slows and eyesight changes. For retirees, this can mean that tasks that once felt easy, such as reading a prospectus, understanding an investment rider, or comparing Medicare plan options (laugh, those examples are actually my form of sarcastic humor), become slower and more frustrating. Faced with frustration, many people stop reading altogether or rely on friends, family, or online forums (alas the world of YouTube and endless Facebook videos) instead of primary sources. That may feel convenient, but it often leads to decisions based on emotion, anecdotes, or whatever social media headline popped up that morning.

There is also the issue of confidence. A retiree who feels unsure of their ability to fully understand a contract or investment report is less likely to ask detailed questions. They may nod politely in a meeting but leave without a clear understanding of plans, proposals, changes, and forecasts.

Again, don’t get mad. Instead, consider the “warmth” that comes from being near someone who has been there and done it. It’s okay to say: “I’m physically, mentally, and emotionally not as sharp as I was, and so, I’m getting my house in order, figuratively and literally.”

The common decline in reading breath, depth, and length creates a dangerous cycle:

1. Lower comprehension leads to avoidance,

2. Avoidance leads to poor decisions, and

3. Poor decisions erode confidence even further.

The financial services and products industry often exacerbates this issue by using jargon such as basis points, alpha, beta, and Monte Carlo simulations without explaining what those terms mean in plain language. This is where we, as financial professionals, can make a difference. Let’s commit to simplifying our communication and ensuring our clients fully understand the information we provide.

Another factor to consider is that reading habits change in retirement. Many retirees spend more time on screens but less time reading long-form material like books, newspapers, or detailed reports. Bite-sized headlines and scrolling can create a false sense of being “informed” without ever engaging deeply enough to understand risks or opportunities. When it comes to investing, this means some retirees are effectively throwing darts at a board — reacting to news, tips, or gut feelings rather than building a plan based on math, logic, and structured analysis.

Sidebar

When it comes to physical newspapers, there is a relatively strong correlation to the near-complete collapse of the printed paper and decreased reading comprehension and length of engagement. In other words, there’s good reason to suspect the sharp decline of physical newspapers is contributing to lower reading comprehension and shorter engagement spans. Studies show that people reading in print tend to understand and retain more than those reading on screens, especially with longer or more complex texts. For example, printed newspapers and books encourage effortful reading and deeper learning. At the same time, news websites often lead to faster, shallower reading. Also, recent studies in higher education consistently show that students who take notes by hand tend to retain more information and perform better on exams than those who rely solely on laptops or tablets. Writing by hand forces students to slow down, process what they’re hearing, summarize it in their own words, and choose what’s important—rather than simply transcribing lectures verbatim. One meta-analysis that looked at over 3,000 college students found a clear performance advantage for handwritten note-takers: more of them achieved top grades than typers. Additional neuroscience work shows that handwriting activates more brain regions associated with memory, movement, and sensory integration than typing does. And so, read and take notes for longer and stronger success.

Let’s Continue

The cost of low literacy is significant. Studies estimate that it drains as much as $2.2 trillion from the U.S. economy every year in lost productivity, missed opportunities, and poor decision-making. For an individual retiree, this can translate to missed Social Security benefits, overpaying in fees, or holding onto underperforming, inappropriate, or excessively aggressive investments for too long. In severe cases, it can even lead to fraud or exploitation when a retiree signs something they do not fully understand. This underscores the critical need for a true fiduciary-based relationship.

This may sound corny, but we have a duty to meet clients where they are. That means using plain language, walking through key decisions step by step, and encouraging clients to ask questions until they feel audio or video, or a Casual Cocktail Conversation of mine, you know how I emphasize the importance of the AMA (ask me anything) component. To do this successfully means recognizing that not everyone reads or processes information the same way. Some people benefit from visual aids, charts, or short summaries rather than dense written material. And try as hard as I do, I know I’ve never perfectly hit the nail on the head, thus the endless revisions and tinkering.

The key takeaway for retirees is clear: continue reading. Stay engaged. Challenge yourself to delve beyond headlines. If a document seems too complex, don't hesitate to seek explanations until it becomes clear.

Your financial future is too important to leave to chance, guesswork, or the latest online rumor.

Retirement is a time when you should be confident and in control, not confused and overwhelmed. The ability to read, comprehend, and act on good information is the foundation of that confidence. If we as professionals do a better job of presenting information clearly — and if retirees commit to staying mentally active and curious — we can replace emotional decision-making with informed, intentional planning. That is how we reduce risk, protect assets, and make sure your money lasts as long as you do.

Streamlining, downsizing, and keeping it simple are not signs of failure. Instead, they are the hallmarks of self-awareness, maturity, and culmination of a life well lived.