|Title||Financial Sophistication in the Older Population|
|Year of Publication||2012|
|Authors||Lusardi, A, Mitchell, OS, Vilsa Curto|
|Series Title||NBER Working Paper Series|
|Document Number||NBER Working Paper No. 17863|
|Institution||National Bureau of Economic Research|
|Keywords||Financial 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.