The TIAA Institute-GFLEC Personal Finance Index (P-Fin Index)

The TIAA Institute-GFLEC Personal Finance Index (P-Fin Index)

The TIAA Institute-GFLEC Personal Finance Index (P-Fin Index) measures knowledge and understanding that enable sound financial decision making and effective management of personal finances among U.S. adults. The P-Fin Index is an annual survey developed by the TIAA Institute and the Global Financial Literacy Excellence Center, in consultation with Greenwald & Associates. It is unique in its breadth of questions and its coverage of the topics that measure financial literacy. The index is based on responses to 28 questions across eight functional areas: earning, consuming, saving, investing, borrowing/managing debt, insuring, comprehending risk, and go-to information sources.

Financial well-being
and literacy in a
high-inflation environment

An unrecognized barrier to retirement income security:
Poor longevity literacy

Annual Survey Reports

Demographic Insights and Data Briefs

Highlights from the 2023 P-Fin Index

  • One-quarter of employed adults decreased their retirement saving in 2022 because of inflation’s impact on their finances. This figure was 40% among Hispanic workers, a figure significantly higher than that of their Asian, Black, and White peers.
  • From January 2022 to January 2023, the share of adults who typically find it difficult to make ends meet increased from 24% to 30%; the share who are debt constrained increased from 20% to 26%; and those without nonretirement savings sufficient to cover one month of living expenses increased to 39% from 32%.
  • On average, U.S. adults correctly answered only 48% of the 28 index questions in 2023. This figure has hovered around the 50% mark since the inaugural 2017 survey.
  • Functional knowledge is consistently lowest in the realm of comprehending risk. On average, only 35% of these questions were answered correctly in 2023.
  • Financial literacy levels among Asians and Whites are roughly equal. Likewise, financial literacy levels among Blacks and Hispanics are roughly equal, albeit at lower levels.
  • Financial literacy tends to be low across generations, but particularly so among Gen Z followed by Gen Y—37% of Gen Z and 30% of Gen Y could correctly answer only up to seven of the 28 index questions.
  • Financial literacy among women consistently tends to lag that of men. The financial literacy gender gap exists among racial and ethnic groups, as well as generations.
  • Analogous to overall financial literacy, functional knowledge levels among women tend to lag those of men, and the gender gap is statistically significant across all functional areas.
  • Financial literacy is lowest among Gen Z in seven of the eight functional areas. Comprehending risk is the one area where functional knowledge is essentially equal across generations, albeit at very low levels.
  • Compared to those with a very high level of financial literacy, those with a very low level are more than four times as likely to have difficulty making ends meet in a typical month; nearly three times as likely to be debt constrained; three times more likely to be financially fragile; more than four times as likely to lack emergency savings sufficient to cover one month of living expenses; and more than three times as likely to spend 10 hours or more per week on issues and problems related to personal finances.
  • The same relationship between financial literacy and financial well-being holds across demographic groups. Among both men and women, among each of the four racial and ethnic groups, and among each generation, there is typically a double-digit decrease in the percentage experiencing a poor outcome with each financial well-being indicator when comparing those with relatively high financial literacy to those with relatively low financial literacy.

Every year the P-Fin Index findings are troubling, but this year more than ever, we are seeing how low levels of financial literacy in a volatile economy can lead to problems. We must focus on helping people of all ages, especially those who are the most vulnerable.

— Annamaria Lusardi

Information about the survey

The initial wave of the survey was fielded online in September 2016 to a nationally representative sample of U.S. adults, ages 18 and older. Each year, the survey oversamples a particular demographic group to better understand the financial literacy levels and financial behaviors of that group. Because the P-Fin Index is an annual study, future waves will enable trend analysis of overall personal finance knowledge, as well as knowledge in the different functional areas and across demographic groups.