2023 Retirement Income Literacy Study: Diversity View

How Retirement Knowledge Takes Shape Across Diverse Communities

The Retirement Income Literacy Study from The American College of Financial Services offers insight and analysis into older Americans’ financial literacy in 12 areas related to retirement income, including Social Security, longevity, investments, and more. In its fourth wave since the study began in 2014, the 2023 study reveals retirement literacy is low across the board. In addition, members of these communities may be less likely to realize that they need help, and less inclined to ask for it from financial professionals. But the study also demonstrates there are steps that can be taken to correct this imbalance.

Overall Scores are Low—Some Lower Than Others

The highest-scoring respondents to our survey knowledge were those who identified as non-white “Other” respondents, including Asians, Asian Americans, and indigenous communities from across the country. Black and African American respondents were the lowest-performing group, with an average score of 24% on a quiz of retirement knowledge: this is lower than the average performance of both the Other community (34%) and the average of the quiz’s respondents as a whole (31%).

Low Financial Well-Being Persists Across Demographics

Based on consumer research and consultation with leading experts, the Consumer Financial Protection Bureau defines financial well-being as “having financial security and financial freedom of choice, in the present and in the future” and has developed a scale with which to measure it.* While Black and Hispanic respondents had generally the lowest scores in the area of financial well-being (43% and 42% respectively), this was only marginally lower than white respondents (45%) and all Other respondents (46%). Scores on financial well-being remained generally low across all groups—consistent and correlated with low financial literacy across all groups.