Wharton Pension Research Council Working Papers

Document Type

Working Paper

Date of this Version



Poor financial capability can have important consequences for well-being in later life. To explore aspects of financial management related to debt, we have designed and analyzed a new module in the 2018 Health and Retirement Study along with information from the 2018 National Financial Capability Study to evaluate the factors associated with debt and debt management in later life. We show that, even for older Americans, student loans and unpaid medical bills represent a large proportion of their debt, and having children also contributes to their indebtedness. By contrast, the more financially literate have more positive financial perceptions and behaviors. Specifically, being able to answer one additional financial literacy question correctly is associated with a higher probability (3-6 percentage points) of reporting an above average credit record and planning for retirement. Clearly, financial knowledge can help limit debt exposure at older ages.


Retirement, debt, student loans, mortgages, financial literacy, financial fragility

JEL Code

G40, G41, G51, G53, H31

Working Paper Number


Copyright/Permission Statement

This project received funding from the TIAA Institute and the Wharton School’s Pension Research Council/Boettner Center. The content is solely the responsibility of the authors and does not necessarily represent the official views of the above-named institutions. ©2020 Lusardi, Mitchell, and Oggero. All rights reserved.

Included in

Economics Commons



Date Posted: 13 February 2020