Chapter

Financial Literacy and Planning: Implications for Retirement Well-being

Annamaria Lusardi and Olivia S. Mitchell

in Financial Literacy: Implications for Retirement Security and the Financial Marketplace

Published in print October 2011 | ISBN: 9780199696819
Published online January 2012 | e-ISBN: 9780191732089 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199696819.003.0002

Series: Pensions Research Council

Financial Literacy and Planning: Implications for Retirement Well-being

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Relatively little is known about why people fail to plan for retirement and whether planning and information costs might affect retirement saving patterns. This chapter 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.

Keywords: retirement; financial planning; literacy; interest; inflation; education; planning; knowledge

Chapter.  7524 words.  Illustrated.

Subjects: Pensions

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