(UM07-10) - Planning and Financial Literacy Among US Households: New Evidence from the Rand Internet Panel
To gain insights into how workers make saving and investment decisions, Lusardi and Mitchell helped develop a new module on planning and financial literacy for the 2004 Health and Retirement Study. Their findings are striking: financial illiteracy is widespread among older workers and particularly acute among women (Lusardi and Michell, 2006a,b). An extended set of planning and financial literacy questions has been added to the Rand Internet Panel, which surveys younger respondents. Data from these two surveys will permit analysis of financial knowledge at different stages of the life-cycle. In addition, the project will assess whether lack of financial literacy represents an important obstacle for retirement planning and saving.