Wharton Pension Research Council Working Papers

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Working Paper

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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.


financial literacy, retirement planning

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Copyright/Permission Statement

Opinions and errors are solely those of the authors and not of the institutions with whom the authors are affiliated. The findings and conclusions of this paper do not represent the views of the SSA, any agency of the Federal Government, or the MRRC. © 2007 Lusardi and Mitchell. All Rights Reserved. © 2007 Pension Research Council. All Rights Reserved


The research reported herein was pursuant to a grant from the US Social Security Administration (SSA) funded by the Michigan Retirement Research Center (MRRC) and the Pension Research Council at The Wharton School. We thank Chetan Mehta for outstanding research assistance.

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Economics Commons



Date Posted: 17 December 2019