Financial Literacy and Financial Sophistication Among Older Americans

TitleFinancial Literacy and Financial Sophistication Among Older Americans
Publication TypeReport
Year of Publication2009
AuthorsLusardi, A, Mitchell, OS, Vilsa Curto
InstitutionCambridge, MA, National Bureau of Economic Research Working Paper 15469
Call Numbernewpubs20091202_w15469.pdf
KeywordsConsumption and Savings, Net Worth and Assets, Retirement Planning and Satisfaction
Abstract

This paper analyzes new data on financial literacy and financial sophistication from the 2008 Health and Retirement Study. We show that financial literacy is lacking among older individuals and for the first time explore additional questions on financial sophistication which proves even scarcer. For this sample of older respondents over the age of 55, we find that people lack even a rudimentary understanding of stock and bond prices, risk diversification, portfolio choice, and investment fees. In view of the fact that individuals are increasingly required to take on responsibility for their own retirement security, this lack of knowledge has serious implications.

Notes

http://papers.nber.org/papers/w15469

Endnote Keywords

Financial Management/Portfolio Choice/Retirement planning/Retirement Saving

Endnote ID

21430

Citation Key5751