Americans Hit Record-Low Financial Literacy Scores, With Just 47% of Questions Answered Correctly
Americans are less financially literate than at any point in the past decade, according to a new survey from the TIAA Institute — a finding that helps explain why economic anxiety remains stubbornly high even as some headline indicators improve.
Out of 28 financial literacy questions, respondents answered only 47% correctly, the lowest score recorded since the survey launched more than ten years ago. A full one in four adults now falls into the “very low financial literacy” category.
Risk Is the Biggest Blind Spot
The survey’s most alarming finding concerns risk comprehension — arguably the most consequential area of financial knowledge. Only 36% of risk-related questions were answered correctly across all age groups, and performance improved only marginally with age.
That gap matters enormously. Poor understanding of financial risk leaves households vulnerable to predatory products, bad investment decisions, and panic-driven choices during market downturns.
Gen Z Scores Lowest; Boomers Score Highest
Gen Z recorded the lowest financial literacy scores of any generation surveyed, while Baby Boomers performed best. The generational divide is stark — but it does not simply reflect inexperience.
Younger adults are navigating financial markets flooded with unregulated advice on social media, while simultaneously facing steeper barriers to the milestones — homeownership, retirement savings, debt-free education — that historically anchored financial learning in lived experience.
In other words, Gen Z has more financial information available than any previous generation and fewer practical opportunities to apply it.
Complexity Is Outpacing Comprehension
The findings point to a structural problem: as financial products and decisions grow more complex, public understanding is moving in the opposite direction. Concepts like Medicare eligibility, withdrawal strategies, compound interest, and market volatility — treated as basics within the financial industry — represent genuine knowledge gaps for millions of households.
This is not simply a matter of individual failing. The United States provides no mandatory personal finance education in most public schools, and financial products are routinely marketed in ways that obscure rather than clarify their terms and risks.
What the Data Demands
For policymakers, the survey is a case for expanding financial education in public schools and strengthening consumer protection regulations — particularly around the marketing of complex investment and debt products to people with limited financial background.
For financial professionals and advisors, the data is a direct challenge to the assumption that clients grasp foundational concepts. The ability to communicate clearly and confirm genuine understanding is not a soft skill — it is a professional obligation with real consequences for the people being served.
Inflation and rising costs are contributing to household financial stress, but this survey suggests the problem runs deeper. When a quarter of American adults lack basic financial literacy, the solution requires more than individual effort — it requires systemic investment in education and stronger guardrails against exploitation.