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Financial Literacy and Retirement Fluency: New insights for improving financial well-being
April 18, 2024The TIAA Institute-GFLEC Personal Finance Index (P-Fin Index), now in its eighth year, annually assesses financial literacy among U.S. adults and examines the relationship between financial literacy and financial well-being. In addition to a robust measure of overall financial literacy,… Read More »
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An unrecognized barrier to retirement income security: Poor longevity literacy
August 21, 2023Longevity literacy is an understanding of how long people tend to live upon reaching retirement age. It is particularly important since retirement income security requires planning, saving, and preparing for a period that is uncertain in length. Unfortunately, data from… Read More »
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Examining the Barriers to Annuity Ownership for Older Americans
October 05, 2021Abstract: The annuity take-up rate is lower than economic theory predicts.1 Using data from the 2018 National Financial Capability Study, we conduct an empirical analysis of individuals in the retirement-planning phase of the life cycle (ages 40–61) and individuals of… Read More »
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Financial Literacy and Financial Behavior at Older Ages
July 29, 2021Abstract: Recent research has documented that people are increasingly entering old age holding more debt than ever before, and having done little or no retirement planning. This paper examines some of the reasons why older peoples’ financial behaviors depart from… Read More »
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Debt Close to Retirement and its Implications for Retirement Well-Being
January 06, 2021Abstract: We analyze debt and debt management of Americans nearing retirement age, to document that older people have numerous financial obligations that can lead to financial distress. Using data from the 2015 National Financial Capability Study and drawing on an… Read More »
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Understanding Debt in the Older Population
December 22, 2020Abstract: Poor financial capability can erode well-being in later life. To explore debt and debt management among older Americans, age 51-61, we designed and analyzed a new module in the 2018 Health and Retirement Study along with information from the… Read More »
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Remaking Retirement: Debt in an Aging Economy
November 18, 2020Summary: Around the world, people nearing and entering retirement are holding ever-greater levels of debt than in the past. This is not a benign situation, as many pre-retirees and retirees are stressed about their indebtedness. Moreover, this growth in debt… Read More »
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How Ordinary Consumers Make Complex Economic Decisions: Financial Literacy and Retirement Readiness
July 13, 2020This paper explores who is financially literate, whether people accurately perceive their own economic decision-making skills, and where these skills come from. Self-assessed and objective measures of financial literacy can be linked to consumers’ efforts to plan for retirement in… Read More »
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Debt Close to Retirement and Its Implications for Retirement Well-being
June 19, 2019We analyze debt and debt management of Americans nearing retirement age, and we show that older people have numerous financial obligations that can lead to financial distress. Drawing on the 2015 National Financial Capability Study and an extensive literature review,… Read More »
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Debt Close to Retirement and Its Implications for Retirement Well-being
June 19, 2019Abstract: We analyze debt and debt management of Americans nearing retirement age, and we show that older people have numerous financial obligations that can lead to financial distress. Drawing on the 2015 National Financial Capability Study and an extensive literature… Read More »
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Defined Contribution Plans and the Challenge of Financial Illiteracy
June 13, 2019Abstract: Retirement investing in the United States has changed dramatically. The classic defined-benefit (DB) plan has largely been replaced by the defined-contribution (DC) plan. With the latter, individual employees’ decisions about how much to save for retirement and how to… Read More »
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Defined Contribution Plans and the Challenge of Financial Illiteracy
June 13, 2019Abstract: Retirement investing in the United States has changed dramatically. The classic defined-benefit (DB) plan has largely been replaced by the defined-contribution (DC) plan. With the latter, individual employees’ decisions about how much to save for retirement and how to… Read More »
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Debt and Financial Vulnerability on the Verge of Retirement
April 27, 2019Abstract : We analyze older individuals’ debt and financial vulnerability using data from the Health and Retirement Study (HRS) and the National Financial Capability Study (NFCS). In the HRS, we compare three groups of people age 56-61 in 1992, 2004,… Read More »
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Financial Fragility Among Middle-Income Households: Evidence Beyond Asset Building
April 08, 2019Abstract: Several years after the financial crisis, financial fragility is not only pervasive in the U.S economy but also prevalent among middle-income households. This highlights the need to consider more than asset levels in order to understand household financial resilience. In… Read More »
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Retirement Savings for All – The Importance of Financial Literacy and FinTech Solutions
January 04, 2019Watch the video.
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Financial Fraud among Older Americans: Evidence and Implications
December 14, 2018Abstract: Objectives: The consequences of poor financial capability at older ages are serious and include making mistakes with credit, spending retirement assets too quickly, and being defrauded by financial predators. Because older persons are at or past the peak of… Read More »
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Financial Fraud among Older Americans: Evidence and Implications
July 12, 2018Abstract: The consequences of poor financial capability at older ages are serious and include making mistakes with credit, spending retirement assets too quickly, and being defrauded by financial predators. Because older persons are at or past the peak of their… Read More »
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The Changing Face of Debt and Financial Fragility at Older Ages
June 12, 2018Abstract: U.S. consumer credit and mortgage borrowing expanded rapidly prior to the 2008-9 financial crisis, allowing relatively unsophisticated consumers to decide how much they could afford to borrow. As a consequence, Americans today are more likely to enter retirement in debt… Read More »
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Should Americans Really Be Worried About Retirement?
June 12, 2018Summary: Many Americans don't think about retirement until it looms in their immediate future. So how confident are Americans that they will have enough money when they retire? And how much are they relying on Social Security and 401(k)s? When is… Read More »
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Knowledge, Fear and Beliefs: Household Demand for Socially Responsible Investments
May 31, 2018Watch the video.
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Exploring the Prevalence, Risk Factors, and Financial Consequences of Fraud: Evidence from the Health and Retirement Study
April 26, 2018Summary: The consequences of poor financial capability at older ages are serious and include making mistakes with credit, drawing down retirement assets too quickly, and being defrauded by financial predators. Because older persons are close to or past the peak of… Read More »
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Debt and Financial Vulnerability on the Verge of Retirement
June 30, 2017Abstract: We analyze older individuals’ debt and financial vulnerability using data from the Health and Retirement Study (HRS) and the National Financial Capability Study (NFCS). Specifically, in the HRS we examine three different cohorts (individuals age 56–61) in 1992, 2004,… Read More »
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The Social Security Statement: Its History and Impact on Knowledge and Behavior
April 25, 2017Watch the video.
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How Trends in Disability Affect Income Inequality and Financial & Retirement Security
January 13, 2017Watch the video.
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Older Women’s Labor Market Attachment, Retirement Planning, and Household Debt
August 31, 2016Abstract: The goal of this paper is to ascertain whether older women’s current and anticipated future labor force patterns have changed over time, and if so, to evaluate the factors associated with longer work lives and plans to continue work at… Read More »
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Americans’ Troubling Financial Capabilities: A Profile of Pre-Retirees
July 08, 2016Summary: Many people envision a life of work that builds to comfortable and enjoyable retirement years. For previous generations, the financial security that marked that post–labor-force chapter hinged on how generous employers were with pensions or how well employers invested and… Read More »
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Employee Financial Literacy and Retirement Plan Behavior: A Case Study
June 16, 2016Abstract: This paper uses administrative data on all active employees of the Federal Reserve System to examine participation in and contributions to the Thrift Saving Plan, the System’s defined contribution (DC) plan. We link to administrative records a unique employee survey… Read More »
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HOW FINANCIALLY LITERATE ARE WOMEN? AN OVERVIEW AND NEW INSIGHTS
February 19, 2016Abstract: We document strikingly similar gender differences in financial literacy across countries. When asked to answer questions that measure knowledge of basic financial concepts, women are less likely than men to answer correctly and more likely to indicate that they… Read More »
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FINANCIAL KNOWLEDGE AND 401(K) INVESTMENT PERFORMANCE: A CASE STUDY
December 01, 2015Abstract: We explore whether investors who are more financially knowledgeable earn more on their retirement plan investments compared to their less sophisticated counterparts, using a unique new dataset linking administrative data on investment performance and financial knowledge. Results show that the… Read More »
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Optimal Financial Knowledge and Wealth Inequality
December 01, 2015Abstract: We show that financial knowledge is a key determinant of wealth inequality in a stochastic lifecycle model with endogenous financial knowledge accumulation, where financial knowledge enables individuals to better allocate lifetime resources in a world of uncertainty and imperfect… Read More »
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Financial Literacy and Retirement Planning in Canada
September 09, 2015Abstract: In this paper, we draw on internationally comparable survey evidence on financial literacy and retirement planning in Canada to investigate how financially literate Canadians are and how financial literacy is linked to retirement planning. We find that 42 percent of… Read More »
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EMPLOYEE FINANCIAL LITERACY AND RETIREMENT BEHAVIOR: A CASE STUDY
August 06, 2015Abstract: This paper uses administrative data on all active employees of the Federal Reserve System to examine participation in and contributions to the Thrift Saving Plan, the system’s defined contribution (DC) plan. We have appended to the administrative records a unique… Read More »
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Financial Knowledge and 401(k) Investment Performance: A Case Study
June 22, 2015Abstract: We explore whether investors who are more financially knowledgeable earn more on their retirement plan investments compared to their less sophisticated counterparts, using a unique new dataset linking administrative data on investment performance and financial knowledge. Results show that the… Read More »
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Financial Literacy and Economic Outcomes: Evidence and Policy Implications
June 05, 2015Abstract: This paper reviews what we have learned over the past decade about financial literacy and its relationship to financial decision-making around the world. Using three questions, we have surveyed people in several countries to determine whether they have the fundamental… Read More »
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Testimony of Annamaria Lusardi Before the ERISA Advisory Council
May 28, 2015Summary: The transfer of risk from defined benefit plan sponsors to plan participants when offering lump sum distributions of pensions was the topic of Annamaria Lusardi’s testimony. In her testimony, she discussed the information that participants need to make informed decisions… Read More »
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Retirement Security
April 27, 20152015 White House Conference on Aging Watch the video of Lusardi's presentation.
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FIVE STEPS TO PLANNING SUCCESS: EXPERIMENTAL EVIDENCE FROM U.S. HOUSEHOLDS
April 27, 2015Abstract: While financial knowledge has been linked to improved financial behaviour, there is little consensus on the value of financial education, in part because rigorous evaluation of various programmes has yielded mixed results. However, given the heterogeneity of financial education programmes… Read More »
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HOW FINANCIALLY LITERATE ARE WOMEN? AN OVERVIEW AND NEW INSIGHTS
March 27, 2015Abstract: We document strikingly similar gender differences in financial literacy across countries. When asked to answer questions that measure knowledge of basic financial concepts, women are less likely than men to answer correctly and more likely to indicate that they do… Read More »
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RISK LITERACY
March 27, 2015Abstract: I examine financial literacy—specifically knowledge of risk—using data from surveys in the United States and other countries. I show that risk literacy is very low; the majority of individuals lack knowledge of concepts such as risk diversification and do… Read More »
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FIVE STEPS TO PLANNING SUCCESS: EXPERIMENTAL EVIDENCE FROM U.S. HOUSEHOLDS
December 17, 2014Abstract: In this paper, we design and field a low-cost, easily-replicable financial education program called “Five Steps,” covering five basic financial planning concepts that relate to retirement. We conduct a field experiment to evaluate the overall impact of “Five Steps” on a… Read More »
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FINANCIAL LITERACY AND RETIREMENT PLANNING IN CANADA
December 17, 2014Abstract: Financial literacy and Canadians’ capacity to plan for retirement is of primary importance for the policy debate over pension system reform in Canada. In this paper, we draw on internationally comparable survey evidence on financial literacy and retirement planning in… Read More »
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FINANCIAL SOPHISTICATION IN THE OLDER POPULATION
October 01, 2014Abstract: This paper examines data on financial sophistication among the U.S. older population, using a special-purpose module implemented in the Health and Retirement Study. We show that financial sophistication is deficient for older respondents (aged 55+). Specifically, many in this… Read More »
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FINANCIAL CAPABILITY NEAR RETIREMENT: A PROFILE OF PRE-RETIREES
October 01, 2014Summary: This report shows how pre-retirees—those between 51 and 61 years of age—face a number of financial challenges. Authors Carlo de Bassa Scheresberg and Annamaria Lusardi use financial capability data from the 2012 National Financial Capability Study to highlight the troubling… Read More »
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Trying the Impossible–Financing 30-Year Retirements with 40-Year Careers: A Discussion of Social Security and Retirement Policy
September 25, 2014Watch the video.
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Financial Literacy Among Graduate Students: A Case Study from the Indiana University System
April 24, 2014Watch the video.
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FINANCIAL LITERACY: DO PEOPLE KNOW THE ABCs OF FINANCE?
February 01, 2014Abstract: Increasingly, individuals are in charge of their own financial security and are confronted with ever more complex financial instruments. However, there is evidence that many individuals are not well-equipped to make sound saving decisions. This paper looks at financial literacy,… Read More »
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PROCEEDINGS OF THE OECD/INFE/GFLEC GLOBAL POLICY RESEARCH SYMPOSIUM TO ADVANCE FINANCIAL LITERACY
October 31, 2013Summary: This document collects the contributions of the four main speakers of the OECD/INFE/GFLEC Global Policy Research Symposium to Advance Financial Literacy, held in Paris on 31 October 2013. The conference was co-organised with the Global Financial Literacy Excellence Center… Read More »
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DEBT AND DEBT MANAGEMENT AMONG OLDER ADULTS
September 01, 2013Abstract: Many individuals lack the financial know-how to manage the complex new financial products increasingly available in the financial marketplace. How people borrow and manage debt has become of increasing policy maker concern, given recent evidence on Americans’ over-indebtedness. As… Read More »
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Active vs Passive Decisions and Crowd-Out in Retirement Savings Accounts
April 18, 2013Watch the video.
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Retiree Out-of-Pocket Healthcare Spending: A Study of Consumer Expectations and Policy Implications
March 07, 2013Watch the video.
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Early Withdrawals from Retirement Accounts During the Great Recession
November 29, 2012Watch the video.
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Sue Lewis introduces Dusan Hradil at the Global Financial Literacy Summit 2012
November 14, 2012Watch the video.
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From Literacy to Financial Planning: Global Retirement Income Adequacy
November 14, 2012Watch the video.
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Annamaria Lusardi on Financial Literacy
October 21, 2012Summary: Dr. Annamaria Lusardi is all about encouraging young and not so young people to become financially literate and take the hope out of retirement planning and turn it into that certainty you deserve.
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Social Security and Retirement Decisions: The Impact of Knowledge and Framing
October 04, 2012Watch the video.
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Can Commitment Savings Help Americans be Better Prepared for Retirement?
June 21, 2012Watch the video.
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Panel Discussion: Directions for Further Research on Financial Literacy
June 21, 2012Watch the video.
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Evaluating Workforce Financial Education and Encouraging New Hires to Save for Retirement
June 21, 2012Watch the video.
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What are the Real-World Framing Influences on Retirement Claiming Behavior?
June 21, 2012Watch the video.
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Financial Literacy and Retirement Planning in the United States
October 11, 2011Abstract: We examine financial literacy in the US 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… Read More »
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Financial literacy and retirement planning in the United States
October 11, 2011Abstract: We examine financial literacy in the US 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… Read More »