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Financial Literacy and Retirement Preparedness: Evidence and Implications for Financial Education Programs Author info | Abstract | Publisher info | Download info | Related research | Statistics Annamaria Lusardi (Dartmouth College and NBER)
Olivia Mitchell (Wharton School)
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Economists are beginning to investigate the causes and consequences of financial illiteracy to better understand why retirement planning is lacking and why so many households arrive close to retirement with little or no wealth. Our review reveals that many households are unfamiliar with even the most basic economic concepts needed to make saving and investment decisions. Such financial illiteracy is widespread: the young and older people in the United States and other countries appear woefully under-informed about basic financial computations, with serious implications for saving, retirement planning, mortgages, and other decisions. In response, governments and several nonprofit organizations have undertaken initiatives to enhance financial literacy. The experience of other countries, including a saving campaign in Japan as well as the Swedish pension privatization program, offers insights into possible roles for financial literacy and saving programs.
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Paper provided by University of Michigan, Michigan Retirement Research Center in its series Working Papers with number
wp144.
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Length: 27 pages
Date of creation: Dec 2006Date of revision:
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.: Mitchell, Olivia S, 1988.
"Worker Knowledge of Pension Provisions ,"
Journal of Labor Economics ,
University of Chicago Press, vol. 6(1), pages 21-39, January.
[Downloadable!] (restricted)
Other versions: Annamaria Lusardi & Olivia S. Mitchell, 2006.
"Baby Boomer Retirement Security: The Roles of Planning, Financial Literacy, and Housing Wealth ,"
Working Papers
wp114, University of Michigan, Michigan Retirement Research Center.
[Downloadable!]
Other versions:
Annamaria Lusardi & Olivia S. Mitchell, 2006.
"Baby Boomer Retirement Security: The Roles of Planning, Financial Literacy,and Housing Wealth ,"
CFS Working Paper Series
2006/20, Center for Financial Studies.
[Downloadable!] Annamaria Lusardi & Olivia S. Mitchell, 2006.
"Baby Boomer Retirement Security: The Roles of Planning, Financial Literacy, and Housing Wealth ,"
CeRP Working Papers
54, Center for Research on Pensions and Welfare Policies, Turin (Italy).
[Downloadable!] Annamaria Lusardi & Olivia S. Mitchell, 2006.
"Baby Boomer Retirement Security: the Roles of Planning, Financial Literacy, and Housing Wealth ,"
NBER Working Papers
12585, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Lusardi, Annamaria & Mitchell, Olivia S., 2007.
"Baby Boomer retirement security: The roles of planning, financial literacy, and housing wealth ,"
Journal of Monetary Economics ,
Elsevier, vol. 54(1), pages 205-224, January.
[Downloadable!] (restricted) Alberto Arenas de Mesa & David Bravo & Jere R. Behrman & Olivia S. Mitchell & Petra E. Todd, 2006.
"The Chilean Pension Reform Turns 25: Lessons From the Social Protection Survey ,"
NBER Working Papers
12401, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Calvet, Laurent & Campbell, John Y. & Sodini, Paolo, 2006.
"Down or out: assessing the welfare costs of household investment mistakes ,"
Les Cahiers de Recherche
832, HEC Paris.
[Downloadable!]
Other versions:
Laurent E. Calvet & John Y. Campbell & Paolo Sodini, 2006.
"Down or Out: Assessing the Welfare Costs of Household Investment Mistakes ,"
NBER Working Papers
12030, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Laurent E. Calvet & John Y. Campbell & Paolo Sodini, 2006.
"Down or Out: Assessing the Welfare Costs of Household Investment Mistakes ,"
Harvard Institute of Economic Research Working Papers
2107, Harvard - Institute of Economic Research.
[Downloadable!] Calvet, Laurent E. & Campbell, John Y. & Sodini, Paolo, 2006.
"Down or Out: Assessing The Welfare Costs of Household Investment Mistakes ,"
Working Paper Series
195, Sveriges Riksbank (Central Bank of Sweden).
[Downloadable!] Laurent E. Calvet & John Y. Campbell & Paolo Sodini, 2007.
"Down or Out: Assessing the Welfare Costs of Household Investment Mistakes ,"
Journal of Political Economy ,
University of Chicago Press, vol. 115(5), pages 707-747, October.
[Downloadable!] (restricted) James J. Choi & David Laibson & Brigitte C. Madrian & Andrew Metrick, 2004.
"Saving or Retirement on the Path of Least Resistance ,"
Levine's Bibliography
122247000000000606, UCLA Department of Economics.
[Downloadable!]
Patrick J. Bayer & B. Douglas Bernheim & John Karl Scholz, 1996.
"The Effects of Financial Education in the Workplace: Evidence from a Survey of Employers ,"
Working Papers
96011, Stanford University, Department of Economics.
[Downloadable!]
Other versions: Annamaria Lusardi & Olivia S. Mitchell, 2006.
"Financial Literacy and Planning: Implications for Retirement Wellbeing ,"
DNB Working Papers
078, Netherlands Central Bank, Research Department.
[Downloadable!]
Other versions: Douglas D. Bernheim, .
"Financial Illiteracy, Education, and Retirement Saving ,"
Pension Research Council Working Papers
96-7, Wharton School Pension Research Council, University of Pennsylvania.
Sewin Chan & Ann Huff Stevens, 2003.
"What You Don't Know Can't Help You: Pension Knowledge and Retirement Decision Making ,"
NBER Working Papers
10185, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions:
Stevens, Ann Huff & Chan, Sewin, 2004.
"What You Don't Know Can't Help You: Pension Knowledge and Retirement Decision Making ,"
Working Papers
05-18, University of California at Davis, Department of Economics.
[Downloadable!] Sewin Chan & Ann Huff Stevens, 2008.
"What You Don't Know Can't Help You: Pension Knowledge and Retirement Decision-Making ,"
The Review of Economics and Statistics ,
MIT Press, vol. 90(2), pages 253-266, 04.
[Downloadable!] (restricted) Bernheim, B. Douglas & Garrett, Daniel M., 2003.
"The effects of financial education in the workplace: evidence from a survey of households ,"
Journal of Public Economics ,
Elsevier, vol. 87(7-8), pages 1487-1519, August.
[Downloadable!] (restricted)
Marianne A. Hilgert & Jeanne M. Hogarth & Sondra G. Beverly, 2003.
"Household financial management: the connection between knowledge and behavior ,"
Federal Reserve Bulletin ,
Board of Governors of the Federal Reserve System (U.S.), issue Jul, pages 309-322.
[Downloadable!]
Full
references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Meier, Stephan & Sprenger, Charles, 2008.
"Discounting Financial Literacy: Time Preferences and Participation in Financial Education Programs ,"
IZA Discussion Papers
3507, Institute for the Study of Labor (IZA).
[Downloadable!]
Mark L. Hoekstra & Scott Hankins & Paige Marta Skiba, 2008.
"The Ticket to Easy Street? The Financial Consequences of Winning the Lottery ,"
Working Papers
344, University of Pittsburgh, Department of Economics, revised Oct 2009.
[Downloadable!]
Annamaria Lusardi, 2008.
"Financial Literacy: An Essential Tool for Informed Consumer Choice? ,"
NBER Working Papers
14084, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Kathrin Dummann, 2008.
"Retirement saving and attitude towards financial intermediaries – Evidence for Germany ,"
Thuenen-Series of Applied Economic Theory
99, University of Rostock, Institute of Economics, Germany.
[Downloadable!]
Annamaria Lusardi, 2008.
"Household Saving Behavior: The Role of Financial Literacy, Information, and Financial Education Programs ,"
NBER Working Papers
13824, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Annamaria Lusardi & Olivia S. Mitchell, 2008.
"Planning and Financial Literacy: How Do Women Fare? ,"
NBER Working Papers
13750, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions:
Annamaria Lusardi & Olivia S. Mitchell, 2008.
"Planning and Financial Literacy: How Do Women Fare? ,"
CeRP Working Papers
72, Center for Research on Pensions and Welfare Policies, Turin (Italy).
[Downloadable!] Annamaria Lusardi & Olivia S. Mitchell, 2008.
"Planning and Financial Literacy: How Do Women Fare? ,"
American Economic Review ,
American Economic Association, vol. 98(2), pages 413-17, May.
[Downloadable!] John N. Muellbauer, 2007.
"Housing, credit and consumer expenditure ,"
Proceedings ,
Federal Reserve Bank of Kansas City, pages 267- 334.
[Downloadable!]
Other versions: Andreas Oehler & Christina Werner, 2008.
"Saving for Retirement—A Case for Financial Education in Germany and UK? An Economic Perspective ,"
Journal of Consumer Policy ,
Springer, vol. 31(3), pages 253-283, September.
[Downloadable!] (restricted)
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