Working Paper: NBER ID: w13750
Authors: Annamaria Lusardi; Olivia S. Mitchell
Abstract: Many older US households have done little or no planning for retirement, and there is a substantial population that seems to undersave for retirement. Of particular concern is the relative position of older women, who are more vulnerable to old-age poverty due to their longer longevity. This paper uses data from a special module we devised on planning and financial literacy in the 2004 Health and Retirement Study. It shows that women display much lower levels of financial literacy than the older population as a whole. In addition, women who are less financially literate are also less likely to plan for retirement and be successful planners. These findings have important implications for policy and for programs aimed at fostering financial security at older ages.
Keywords: Financial Literacy; Retirement Planning; Women; Poverty
JEL Codes: D91
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| lower financial literacy (G53) | inadequate retirement planning (J26) |
| financial literacy (G53) | retirement planning behavior (D14) |
| understanding risk diversification (G11) | likelihood of planning (C53) |
| lack of knowledge about interest rates (E43) | barrier to effective planning (P11) |
| financial literacy (G53) | success of executing plans (L21) |