Financial Sophistication in the Older Population

TitleFinancial Sophistication in the Older Population
Publication TypeReport
Year of Publication2012
AuthorsLusardi, A, Mitchell, OS, Vilsa Curto
Series TitleNBER Working Paper Series
Document Number17863
InstitutionNational Bureau of Economic Research
CityCambridge, MA
KeywordsFinancial literacy, Retirement Planning and Satisfaction

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 group lack a basic grasp of asset pricing, risk diversification, portfolio choice, and investment fees. Subpopulations with particular deficits include women, the least educated, persons over the age of 75, and non-Whites. In view of the fact that people are increasingly being asked to take on responsibility for their own retirement security, such lack of knowledge can have serious implications.

Citation Key9880