Financial Literacy and Retirement Planning in the United States

by Annamaria Lusardi and Olivia S. Mitchell; CeRP WP N. 107/11

The paper has been realized for the Netspar Theme grant project  Financial Literacy: Evidence and Implications for Retirement Planning, Saving Behavior, and Financial Education Programs”and presented at the CeRP workshop “Financial Literacy around the World” (FLat World) (Collegio Carlo Alberto, 20-21 December 2010).


We examine financial literacy in the United States using the new National Financial Capability Study, wherein we demonstrate that financial literacy is particularly low among the young, women, and the less-educated. Moreover, Hispanics and African-Americans score the least well on financial literacy concepts. Interestingly, all groups rate themselves as rather well-informed about financial matters, notwithstanding their actual performance on the key literacy questions. Finally, we show that people who score higher on the financial literacy questions are also much more likely to plan for retirement, which is likely to leave them better positioned for old-age. Our results will inform those seeking to target financial literacy programs to those in most need.

Published: March 2011

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