I agree that financial literacy is overall pretty low in the US. And I also agree with the poster that said it is confusing by design to keep the services of FAs, tax specialists, and brokers in business as well as to give various special interests their payday with the various tax incentives, loopholes, etc.
It wasn't that long ago that I finally started paying attention to my own retirement and I was well into my 40s. Oh I have always, since Day 1 of working post-college, contributed to a 401K "at least up the match" and up until 2008 was invested mostly in stock funds. But that was certainly just a happy accident. My own financial illiteracy has cost me a lot. Most of the funds I was invested in were actively managed, had high ERs, were duplicative, not broadly diversified across asset classes, etc. I sold my stock funds at rock bottom - doing exactly the opposite of what you should do in times of crisis. I really think that I represent a huge number of people that never embraced learning about investing, and quite frankly, find it intimidating. I would get my 401K quarterly statements, glance at them, and toss them in the shred bin. The various percentages, ERs, graphs, blah, blah, just made my eyes glaze over. When I finally decided to get my crap together and figure out what I was invested in and how to forge a retirement plan moving forward, what I came to realize is that it can be stupidly simple to get a good plan in place - but you have to first learn a CRAP LOAD of industry jargon and terms to figure that out. Oh, once you become familiar with all the terms (equities, expense ratios, PEs, short term, intermediate, long term bonds, value stocks, roths, tiras, asset allocation, roth conversions, annuities, CDs, RMDs, etc, etc. etc.) and all the rules (contribution limits, withdraw ages, tax consequeces) you are well on your way. But I maintain that some folks just LIKE investing and following their money and reading about what is going on in the markets and the world of finance. But I think most people don't. It's kind of like math homework to me. Not fun. Just a necessary evil.
My point, I guess, is that yes, education of the masses is needed. And we could maybe simplify it some as well.
I'm in the great state of Virginia, where recently our Board of Education has added a new requirement for high school graduation. Students who enter 9th grade in 2011-2012 and beyond must successfully complete a 1-credit course in Economics and Personal Finance.
From the state course description:
"Students learn how to navigate the financial decisions they must face and to make informed decisions related to career exploration, budgeting, banking, credit, insurance, spending, taxes, saving, investing, buying/leasing a vehicle, living independently, and inheritance. Development of financial literacy skills and an understanding of economic principles provide the basis for responsible citizenship and career success. In addition to developing personal finance skills, students also study basic occupational skills and concepts in preparation for entry-level employment in the field of finance. The course incorporates all economic and financial literacy objectives included in the Code of Virginia §22.1-200-03B. This semester course is a graduation requirement beginning with the class of 2015."
Also, you can believe I have already been teaching my kids about LBYM and investing early.