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Key Takeaways On a widely used national test of financial knowledge, U.S. adults only got about half of the questions right.
Their performance is slipping even as money matters grow more complex.
Americans performed particularly poorly on questions related to risk and retirement.
Americans are increasingly confident about their money skills, but the numbers tell a different story.
The Personal Finance Index, developed by the TIAA Institute and the Stanford University Global Financial Literacy Excellence Center, poses 28 questions covering everything from budgeting and borrowing to risk and retirement. U.S. adults only correctly answer about half of those questions, a level that has never risen above 52% since the survey began in 2017.
According to a recent report from The New York Times, the average score fell to just 47% this year, the lowest result in the index’s 10-year history and a clear sign that financial literacy is not just low but deteriorating.
That decline is especially worrying because the index is designed to measure everyday knowledge, not obscure trivia. The questions test if people understand concepts like interest, inflation and retirement saving, which are all central to decisions Americans face throughout their lives. When adults consistently miss half of these basics, it suggests many don’t know what they’re doing as they navigate student loans, credit cards, mortgages and retirement plans.
“Certainly, it’s disturbing,” Surya Kolluri, head of the TIAA Institute, told the Times. However, he noted that the results are not particularly surprising. Since the onset of the Covid-19 pandemic, many Americans have faced ongoing financial strain, driven in part by rising inflation that has pushed up prices of everything from food to fuel.
At the same time, the growing presence of financial influencers across social media has added to the confusion, making it harder for individuals to identify reliable and practical advice, he said.
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