Financial Literacy in America Has Hit a 10-Year Low
Financial knowledge among U.S. adults fell to its lowest point in a decade, according to the 2026 TIAA Institute–GFLEC Personal Finance Index (P-Fin Index). Americans gave correct answers to 47% of the questions on average, with scores dropping across five of the eight tracked domains. For anyone planning their retirement, the weakest area in the data is also the one with the heaviest stakes.
What makes this data useful is its specificity. The survey identifies exactly which domains fell and by how much, giving you a concrete list of areas that are worth strengthening.
One in Four Americans Now Scores in the Lowest Financial Literacy Tier
According to the 2026 TIAA Institute–GFLEC Personal Finance Index, the latest financial literacy statistics show that U.S. adults answered just 47% of 28 personal finance questions. It marks the lowest point in the survey’s 10-year history. This decline in financial literacy in America spans five of the eight domains the index tracks.
The TIAA Institute–GFLEC Personal Finance Index tracks the same 28 questions every year. It monitors eight domains: earning, consuming, saving, investing, borrowing, insuring, comprehending risk, and gathering information.
Take this financial literacy quiz to test your own knowledge across all eight. The national average score has never exceeded 52% since tracking began.
| Financial Literacy Tier | Percentage Score Bracket | Questions Answered Correctly | Share of U.S. Adults |
| High Financial Literacy | 76% to 100% | 22 to 28 questions | 15% |
| Upper-Intermediate Literacy | 51% to 75% | 15 to 21 questions | 32% |
| Lower-Intermediate Literacy | 26% to 50% | 8 to 14 questions | 29% |
| Very Low Financial Literacy | Less than 26% | 7 or fewer questions | 25% |
Source: TIAA Institute–GFLEC Personal Finance Index. Note: Percentages sum to 101% due to rounding in the original report dataset.
This score shows how ready people are to make choices that dictate their financial security. A growing group of adults with very low scores is driving the national decline. Back in 2017, one in five participants answered seven or fewer questions right. By 2026, that share climbed to one in four. The low end of the results pulls the whole average down.
Which financial literacy domains declined in 2026?
Five areas fell in the 2026 annual report: consuming, borrowing, earning, insuring, and comprehending risk. Scores for saving, investing, and finding reliable information held steady.
The subjects that held ground are ideas people encounter every day. Decades of workplace retirement plans have helped employees learn about basic savings and mutual funds. The drops occurred where financial knowledge faces real stress. People struggle to verify insurance coverage rules, calculate compound interest on debt, or manage volatile market factors.
If you’re close to retirement, these are the areas where weak knowledge carries the steepest price. Strengthen them, and the bigger decisions get sharper.
Risk Is the Weakest Domain, and It Doesn’t Improve With Age
Americans score lowest on risk comprehension, and older adults show no natural advantage over younger generations. Only 36% of risk questions received correct answers in the latest survey.
Most financial knowledge builds with age. Working for 30 years builds intuition about income. Managing a mortgage means years of practice with debt. Risk comprehension breaks this pattern. Age alone doesn’t close the distance.
Sequence of returns risk, longevity, and inflation feel less immediate while a paycheck is coming in. Market drops hurt less when contributions keep arriving. That changes in retirement. Your savings do the work your paycheck used to do. The timing of market swings matters in ways it didn’t before.
“Market risk gets all the attention, but inflation is the risk retirees feel the most and plan for the least,” says Nancy Gates, Boldin’s financial experience principal and lead educator.
“Sequence of returns, longevity, and spending shocks can also derail a retirement plan, and are far less likely to be on anyone’s radar,” she adds. “When you understand risk, your choices around spending, saving, and lifestyle sharpen.”
Run these risks against your own numbers now, while you can still adjust what you find.
Gen Z Has the Lowest Financial Literacy Score of Any Generation
Gen Z logged a 38% average score, landing nine points under the national average.
The weakest area for these younger adults is insurance literacy, and the distance from older generations is largest there. Baby boomers scored highest, with Gen X, the Silent Generation, and millennials clustered in the middle. Gen Z came in last.
| Generation | Average P-Fin Index Score | Performance Context |
| Baby Boomers | 54% | Highest scoring generation |
| Gen X | 49% | Above national average |
| Silent Generation | 47% | Tied with U.S. national average |
| Millennials | 46% | Below national average |
| Gen Z | 38% | Lowest scoring generation |
Source: 2026 TIAA Institute–GFLEC Personal Finance Index.
The widest knowledge shortfall involves insurance. Younger adults struggle to identify what policies cover, what they should cost, and when coverage makes financial sense. Without these basics, people buy bad policies or go unprotected.
You can use this insight to support your family. If you’re helping adult children or grandchildren build financial security, talk to them about insurance. Establishing that knowledge early can help improve their financial decisions over the decades to come.
Low Financial Knowledge Erodes Confidence, Not Just Understanding
Six in 10 Americans struggle to make and act on financial decisions, according to a recent Corebridge Financial survey. This widespread hesitation stems directly from a crisis of confidence: only 40% of U.S. adults report feeling extremely or very confident in their ability to manage their money.
| Metric / Financial Outcome | Financial Beginners (Novice/Intermediate Knowledge) | Financially Savvy (Advanced/Expert Knowledge) |
| Share of U.S. Population | 62% | 38% |
| Confident in executing choices | 21% | 68% |
| Saved $250,000+ for retirement | 15% | 38% |
| Experience high financial stress | 29% | 15% |
| Consult a Financial Professional | 21% | 37% |
Source: Corebridge 2026 Financial Capability Survey.
Deficits in financial knowledge do more than create confusion; they breed inertia. The survey found that 62% of adults rate their overall financial knowledge as novice or intermediate, classifying them as “financial beginners.” This self-doubt frequently stalls positive action.
Those who consider themselves “financially savvy” experience an entirely different reality. They are more than three times as likely to feel confident when making and executing financial choices compared to beginners (68% vs. 21%). That certainty translates directly into retirement readiness: the financially savvy are more than twice as likely to have saved $250,000 or more for retirement.
The difference extends to anxiety and professional guidance: financially savvy adults are roughly half as likely to report high financial stress (15% vs. 29%) and nearly twice as likely to work with a financial professional (37% vs. 21%).
“People can feel stuck when it comes to their finances, and financial literacy provides an unlock,” notes Nancy. “When you understand the concepts behind the decisions, the path forward gets clearer, and so does your confidence to take it.”
A retirement plan replaces vague uncertainty with a specific set of decisions you can prepare for.
Why Do Financial Literacy Gaps Matter More in Retirement?
Retirement decisions bring permanent consequences because you lack a recurring salary to fix planning errors. Shortfalls in knowledge become expensive after you leave work.
- Key retirement decisions are irreversible: Social Security provides a perfect example. The day you claim benefits fixes your payment formula permanently. Pension selections and Roth conversion windows operate under tight timelines too. These moves dictate your cash flow for decades.
- The correction window closes at retirement: If you make a mistake while working, you can save more money or work extra hours. Retirement ends that safety net. A poorly timed withdrawal or an overlooked tax penalty is harder to correct once you’ve retired. Stress-testing these scenarios before you commit is how you catch problems while there’s room to adjust.
- Complexity piles up fast: Required minimum distributions (RMDs), Medicare premium thresholds, state taxes, and healthcare bills arrive all at once. These systems collide in ways that demand deep analysis.
Medicare and long-term care are the costliest blind spots
The TIAA Institute-GFLEC Personal Finance Index highlighted six additional questions focused entirely on retirement fluency. The average score dropped to just 37% on those specific items, well below the 47% benchmark for general knowledge.
| Retirement Topic Covered in Survey | Percentage of Correct Answers | Performance Classification |
| Lifetime Income Options | 52% | Highest understood topic |
| Workplace Retirement Savings | 43% | Intermediate understanding |
| Social Security Benefits | 41% | Intermediate understanding |
| Life Expectancy Statistics | 33% | Low understanding |
| Long-Term Care Realities | 28% | Critical blind spot |
| Medicare Coverage Rules | 27% | Lowest understood topic |
Source: TIAA Institute-GFLEC Personal Finance Index
The one relative bright spot is lifetime income: 52% of Americans understand that an annuity can protect against outliving savings. Scores fall from there, with Medicare knowledge sitting at 27% and long-term care at 28%. These are massive retirement expenses, yet they’re the subjects people understand least.
“Medicare doesn’t have to be overwhelming,” says Nancy. “Once you understand how the pieces fit together, it becomes one of the most empowering things you can do for your retirement. Healthcare is a significant cost, and the retirees who thrive are the ones who get curious about it early.”
A Retirement Plan Does What Financial Knowledge Alone Cannot
A retirement plan models the real-world collision of taxes, healthcare, and market risk you can’t calculate in your head. It simulates how your choices affect the outlook over 20 or 30 years.
The TIAA-GFLEC survey highlights a telling pattern. Among those with high “retirement fluency” scores, saving on schedule is the norm. They’re also more than twice as likely to have calculated their retirement income needs. Knowing a concept is different from mapping your personal assets against it.
The Corebridge data shows that 85% of adults want to improve their financial lives this year. Retirement stands as the number one reason for that motivation.
The Boldin Planner connects that motivation to specific numbers. It reveals trade-offs before you commit and creates a framework you can adjust as your situation changes.
Four Ways to Close the Gaps That Cost the Most in Retirement
You can build retirement readiness by focusing your attention on the most critical financial blind spots. The latest research shows where consumer knowledge falls short, providing a direct to-do list:
- Map out your risk variables: Take time to study sequence of returns and inflation. These items won’t make sense without deliberate focus.
- Medicare and long-term care demand early focus: These categories represent the lowest scores in the 2026 data. They also represent your largest potential costs. Learn the rules before deadlines approach.
- Run your numbers before you commit: Check your Social Security timing and explore Roth conversions first. The Boldin Planner lets you simulate choices safely, and this guide on retirement financial decision-making clarifies key trade-offs.
- An annual review keeps your strategy fresh: Tax laws shift and inflation adjustments occur every year. A static plan goes stale.
You don’t need a master’s degree in finance to build a secure future. Your plan is how the knowledge compounds.
Frequently Asked Questions About Financial Literacy in America
Financial literacy means understanding core concepts like taxes, investing, and insurance. It matters during retirement because your choices become permanent. Selecting a Social Security date or structuring portfolio withdrawals requires real comprehension. Getting them wrong can reshape your finances for decades.
The TIAA Institute–GFLEC Personal Finance Index evaluates national knowledge each year. It surveys adults using 28 questions across eight financial domains. The national average score never topped 52% in ten years. In 2026, it touched a record low of 47%.
Risk comprehension is the lowest-scoring area in the annual index. Only 36% of participants answered risk questions right in 2026. Age fails to fix this issue on its own, making it a persistent obstacle for retirees.
Low scores lead to bad timing on Social Security, missed tax opportunities, and poor insurance picks. This confusion hampers your confidence and prompts harmful delays. A structured retirement plan can compensate for knowledge shortfalls while helping you build understanding over time.
