Financial Literacy and Planning: Implications for Retirement Wellbeing

38 Pages Posted: 23 May 2011 Last revised: 31 Aug 2024

See all articles by Annamaria Lusardi

Annamaria Lusardi

Stanford University - Stanford Institute for Economic Policy Research

Olivia S. Mitchell

University of Pennsylvania - The Wharton School, Pension Research Council; University of Pennsylvania - The Wharton School; National Bureau of Economic Research (NBER)

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Date Written: May 2011

Abstract

Relatively little is known about why people fail to plan for retirement and whether planning and information costs might affect retirement saving patterns. This paper reports on a purpose-built survey module on planning and financial literacy for the Health and Retirement Study which measures how people make financial plans, collect the information needed to make these plans, and implement the plans. We show that financial illiteracy is widespread among older Americans, particularly women, minorities, and the least educated. We also find that the financially savvy are more likely to plan and to succeed in their planning, and they rely on formal methods such as retirement calculators, retirement seminars, and financial experts, instead of family/relatives or co-workers. These results have implications for targeted financial education efforts.

Suggested Citation

Lusardi, Annamaria and Mitchell, Olivia S., Financial Literacy and Planning: Implications for Retirement Wellbeing (May 2011). NBER Working Paper No. w17078, Available at SSRN: https://ssrn.com/abstract=1848593

Annamaria Lusardi (Contact Author)

Stanford University - Stanford Institute for Economic Policy Research ( email )

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HOME PAGE: http://siepr.stanford.edu/people/annamaria-lusardi

Olivia S. Mitchell

University of Pennsylvania - The Wharton School, Pension Research Council ( email )

3302 Steinberg Hall-Dietrich Hall
3620 Locust Walk
Philadelphia, PA 19104-6302
United States

University of Pennsylvania - The Wharton School ( email )

Philadelphia, PA 19104-6365
United States

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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