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How Math Anxiety Ruins Retirement – And What to Do About It

How Math Anxiety Ruins Retirement – And What to Do About It
February 05
01:13 2019

We all know the horrors of math anxiety. It’s an affliction suffered by far too many people. It may also be responsible for the low financial literacy rates we see. And that can hurt retirement saving. Reversing the overall condition may be complicated. We can, however, isolate its negative impact on retirement and possibly reduce those effects.

Although studies on the disorder date from as far back as at least 1972, a 1980 article (Sheila Tobias and Carol Weissbrod, “Anxiety and Mathematics: An Update,” Harvard Educational Review: April 1980, Vol. 50, No. 1, pp. 63-70) offers the definitive description of math anxiety. The authors designate it as “the panic, helplessness, paralysis, and mental disorganization that arises among some people when they are required to solve a mathematical problem.”

Math anxiety exhibits both physiological and psychological conditions. Lee Thompson, professor of psychological sciences at Case Western Reserve University in Cleveland, Ohio, says, “Math anxiety is defined as a feeling of tension and fear that accompanies math-related activities, is associated with poorer mathematics achievement, avoidance of situations involving mathematics, and more limited engagement in STEM-related careers. Furthermore, math anxiety is evident as early as the early elementary school years and math anxious children often have math anxious parents.”

Psychological Science published a study in 2015 suggesting math anxious parents can transfer math anxiety to their children, with one important caveat (Maloney, E.A., Ramirez, G., Gunderson, E.A., Levine, S.C., & Beilock, S.L., “Intergenerational effects of parents’ math anxiety on children’s math achievement and anxiety,” Psychological Science, August 7, 2015). University of Chicago psychologists Sian Beilock and Susan Levine concluded “We found that when parents are more math anxious, their children learn significantly less math over the school year and have more math anxiety by the school year’s end—but only if math-anxious parents report providing frequent help with math homework.” Sometimes it’s better if parents don’t try to help their kids.

Parents alone aren’t the only adult source for a child’s math anxiety. A 2010 study (Beilock, S.L., Gunderson, E.A., Ramirez, G., & Levine, S.C., “Female Teachers’ Math Anxiety Affects Girls’ Math Achievement,” Proceedings of the National Academy of Sciences, January 25, 2010) suggests teachers may be the source, although not in the way you think. It’s not what they teach, but their own predilection towards math. “The more anxious teachers were about math, the more likely girls (but not boys) were to endorse the commonly held stereotype or belief that ‘boys are good at math and girls are good at reading,’” wrote the researchers.

Lara Langdon, VP of Research and Algorithm Development at United Income in Washington, D.C., holds a Ph.D. in Mathematics teaches a class entitled “Mathematics and Politics,” a math class for non-math majors at George Washington University. She’s seen the results of teacher anxiety first hand. “In teaching college math to non-majors,” she says, “I continuously encounter students with ‘math anxiety.’ Many students had teachers in the past who may have been anxious about teaching mathematics or had limited subject matter expertise, leading students to not having their questions appropriately answered and thus having a limited understanding of foundational topics. Students will tell me they were ‘just not good at math,’ but I have found that their assessment of their own abilities was almost always inaccurate, and, by end of the semester, students would end up surprised at what they were able to accomplish. It helped that my class was able to use math in a way that was interesting to students, such as discussing fair voting systems and the electoral college, but there is no reason why those same students couldn’t succeed in a traditional math class. “

Other educators have seen the same behavior. “As a former elementary school teacher, I frequently saw math anxiety start from a very young age,” says Leah Hadley, now President of Great Lakes Investment Management in Cleveland, Ohio. “Some students believe that they simply cannot do math and anything that has to do with numbers makes them uncomfortable. As a financial advisor, I often see it when one spouse gives all of the financial responsibility to the other because they do not have confidence in their own ability to handle their finances.”

As Hadley indicates, math anxiety can present an obstacle to everyday living. “Math is not merely an academic subject, it is also an important tool for many important things in real life,” says Alex Bozman, Founder and CEO of Nuhubit Software Studios LLC in Santa Clarita, California. “Math anxiety prevents people from using that powerful tool to solve real life problems. Regardless of whether the math is actually easy or hard, the anxiety distracts its sufferer from focusing on the problem. Instead they have to first fight the anxiety before even approaching the actual math.”

The damaging results of math anxiety may explain the low financial literacy rates we see. Tiffany Young writes about the latest developments in teaching, public policy, standardized testing, educational technology, and career paths for HeyTutor. She says, “Math anxiety makes it enormously difficult to focus and succeed in accounting and budgeting matters. Overwhelming feelings can take over, and ‘analysis paralysis’ takes control; someone with math anxiety sees only blur of numbers, figures, spreadsheets, and equations, and even if he or she is high performing, this confusion can have a detrimental impact on someone’s work or school.”

How Math Anxiety Ruins Your Retirement
More than work and school, math anxiety can harm our personal lives. We can see this happening today with our typical activities. What we not see is how it can hurt us in the future. “Math anxiety can interfere with any type of task that requires numbers, even a task as simple as calculating a tip for a restaurant meal,” says Thompson. “While I couldn’t find any research (I only did a quick search of the literature) specifically addressing the impact of math anxiety on retirement planning, it would make sense that being affected by math anxiety would make is less likely an individual would engage in financial planning because they tend to avoid tasks which involve any type of math. I would also hypothesize that a highly math anxious person might be poorer at estimating their financial needs in retirement too.”

The inability to visualize tomorrow’s financial needs today may explain why we see so many statistics bemoaning the lack of, specifically, retirement readiness and, more generally, financial wellness. “Aside from discouraging children from pursuing a dream career as an astronaut, doctor or scientist, math anxiety can also prohibit individuals from adequately saving for retirement,” says Langdon. “The GAO reports that more than two thirds of retirees have not saved enough by retirement to replace their pre-retirement income. Math anxiety can contribute to ignoring credit card debt, defaulting on student loans, failure to adequately save or contribute to your retirement savings, and not appropriately planning or budgeting for monthly expenses.”

We can easily identify the root symptom of the problem caused by math anxiety. “Consider how an allergy makes a good metaphor for math anxiety,” says Bozman. “Somebody allergic to seafood avoids it. People with math anxiety avoid doing math. This is a handicap in modern life! Retirement planning is a perfect example of this. Avoiding retirement planning is the worst thing one can do to save enough to provide a comfortable, secure retirement. The longer one avoids making some decisions and starting the planning process, the less likely they are to ever recover their potential for savings.

“Math anxiety inhibits people from actually starting to save for retirement,” says Denise J. Nostrom, a Financial Advisor at Diversified Financial Solutions in Medford, New York. “The lack of understanding and the fear of numbers makes it easier for someone to just do nothing.”

If the propensity to “do nothing” sounds familiar, it’s because we see the behavior in circumstances beyond retirement. The issue, though, is that once this behavior starts, it becomes a habit that’s hard to break. “This is the old problem, where we have the tendency to think ‘if I ignore this problem, it’ll go away,’” says Sam Weiss, an actuary for Nyhart in Indianapolis, Indiana. “With math anxiety, we have the inclination to think ‘well I don’t know how much I’m saving or how I should be investing, and I’m no good at math, anyway, so I’ll put this off until another time.’ Once that anchor is set, it’s even more difficult to re-adjust and save/invest for retirement the way you should be.”

Such idleness may signal an employee has math anxiety. But it’s more than just “doing nothing.” Something in particular is triggering the anxiety. To help overcome math anxiety, we need to identify and isolate that triggering event. “Math anxiety is extremely harmful to retirement savings when it causes a person not to participate in a retirement plan because they do not feel confident in the relevant decisions they need to make in order to participate,” says Hadley. “For example, someone with math anxiety may not even be comfortable determining the amount of each check that should be allocated to their retirement plan. As a result, they simply do not participate at all.”

Anxiety heightens one’s fears. This can affect our state of mind, as it tempts us to make the quick decision, which isn’t necessarily the best decision. Thompson says, “I would guess that a highly math anxious person might be more likely to take a financial adviser’s word during financial planning without taking the time to fully understand the mathematical basis for planning decisions. This tendency in turn may make them more at risk for being taken advantage of or for making decisions based on emotion instead of rational decision-making processes.”

Issues and factors surrounding the actions needed to best prepare for retirement makes those with math anxiety especially vulnerable. This could ruin one’s retirement in a very different way than simply doing nothing. “People planning retirement and getting close have a lot of financial companies and advisors providing information,” says Bozman. “It’s hard to choose. Even if the future retiree has a pension coming, there are many options to consider. They all require some comfort with math. Understanding and evaluating products like annuities, reverse mortgages, or whole life insurance is rough for somebody with math anxiety, but taking a salesperson’s word for the value of a product can be a big mistake.”

How to Limit the Damage Caused by Math Anxiety
Retirement produces a lot of difficult and challenging choices. The fact these choices sometimes contain intimidating numbers can only make it worse. “Should I take that golden parachute retirement offer? Should I take more than my RMD from my 401k? Should I select a traditional or a Roth IRA? Math provides the answers,” says Bozman. “The math to solve these problems is usually not too complex, but somebody with math anxiety may put off dealing with the decision — perhaps until it’s too late. Seeing numbers as monsters makes the retirement planning confusing and anxiety producing.”

Culturally, we continue to enable math anxiety, just like those elementary school teachers from the study we mentioned earlier. “Society has somewhat embraced math anxiety, rather than breaking down the ‘math is hard’ stigma,” says Langdon. “For example, many software companies today refuse to show percentages, pie charts, or graphs to their clients for fear of ‘scaring the average customer,’ denying the consumer valuable information about their accounts.”

The problem of math anxiety isn’t solved by changing only one variable. Many factors go into properly preparing yourself in order to live a comfortable retirement. Math anxiety only makes it more difficult to juggle all these factors simultaneously. “The issue of math anxiety is also tied in with personal savings rate,” says Pedro M. Silva, an Investment Executive at Provo Wealth Management Group in Shrewsbury, Massachusetts. “We spend so much time encouraging people to ‘participate’ that we often miss the end of goal of ‘meaningful’ participation. Someone might be as unwilling to do the math on what their morning breakfast habit costs as they are to calculate whether they are saving enough for retirement.”

So, how do we break the strangle-hold of math anxiety? “Approaching adults with math anxiety in a way that first addresses their emotions and doesn’t immediately confront them with numbers and formulas,” says Thompson.

“We address the math anxiety problem by simplifying it,” says Weiss. “That is, take away the guess work and the anxiety. One thing we’ve seen successful is to provide a digital tool that give participants easy feedback without getting much into the math. Users of this tool contribute 74% more to their 401k than those that don’t.”

Keeping things simple means talking the language of your audience in a setting they are comfortable with. “We meet people where they are at,” says Hadley. “We talk to them about what is holding them back from participating in retirement planning and begin to address the underlying anxiety with education.”

Along those lines, then, it would make sense to look to the education industry for some guidance. “In class, mathematics professors use many strategies to fight off math anxiety ranging from maintaining a positive and encouraging environment, encouraging questions, giving real life examples and making the subject interactive and fun,” says Langdon. “The same tactics can be used in the space of retirement planning. Both financial advisers and financial planning software have a role to play. For example, software can be designed to encourage interaction. In retirement planning that can be anywhere from playing with the numbers in your budget to positively reinforcing good financial behavior such as paying off debt or saving more than planned. Not only is the use of mathematics essential for retirement and financial planning, it is also the non-emotional source of truth that indicates whether you can achieve your financial goals. It is important to use math to ground emotional conversations about the latest market activity and instead focus on the quantifiable metrics that track financial progress and can motivate a client to stay the course.”

Ironically, the source of the greatest vulnerability caused by math anxiety may also be the basis of the best way to prevent its damage. And a proper education program may lead them down the path to discover and embrace this solution. “Education is best way to combat math anxiety,” says Nostrom. “Adults must realize that if they do not understand or feel comfortable with it, they need to see someone like a financial adviser. We do this in other areas of our lives – for example: we see a doctor if we are not feeling well or a mechanic if our car is not running right. Retirement planning should not be any different. If you have math anxiety, an adviser can guide you to help your meet your retirement goals.”

This same solution can work with many demographic groups because math anxiety infects all kinds of people. “Regardless if you’re an older adult struggling to keep your books straight in order to plan for retirement, or you’re a recent college grad trying to improve your financial literacy, math anxiety can hinder your efforts to succeed,” says Young. “Consider working with an expert who can be your guide and coach in this area, no matter what your age is or where you’re at in your retirement planning. An expert in math and accounting can help you understand basic concepts, so you can meet with an accountant and not feel blind-sided by anything they bring up.”

Still, this presents a caveat emptor situation – a “who watches the watchdog” type of dilemma. “Working with trustworthy financial advisers can help, because they can create graphic representations that show pictures simplifying the results of various plans,” says Bozman. “They can also do some of the math for you. Having a really good adviser who cares about their clients’ best interest is important. But not all financial advisers take their fiduciary duties with the seriousness that they should. If you do the math (or at least can check theirs), you can sense if they do. If you don’t, you might not.”

For participants of company retirement plans, perhaps this represents an opportunity for the plan sponsor to make the benefit more meaningful by vetting potential advisers and offering them through the plan.

Christopher Carosa is a keynote speaker, journalist, and the author of  401(k) Fiduciary SolutionsHey! What’s My Number? How to Improve the Odds You Will Retire in Comfort, From Cradle to Retirement: The Child IRA, and several other books on innovative retirement solutions, practical business tips, and the history of the wonderful Western New York region. Follow him on TwitterFacebook, and LinkedIn.

Mr. Carosa is available for keynote speaking engagements, especially in venues located in the Northeast, MidAtantic and Midwestern regions of the United States and in the Toronto region of Canada.

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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