US adults hit record low in financial literacy test
Rising stress and complex market decisions drive decade-low scores, leaving quarter of population with very low knowledge
American adults have recorded the lowest scores in a decade on the TIAA Institute’s 2026 financial literacy assessment, correctly answering just 47% of questions covering spending, borrowing, investing, and retirement. The result marks the poorest performance in the index’s 10-year history, underscoring a significant gap between the complexity of modern financial products and the public’s understanding of them.
The proportion of US adults classified as having very low financial literacy has risen from 20% to 25% since 2017. Surya Kolluri, head of the TIAA Institute, told Yahoo Finance that the decline is not statistical noise but a measurable expansion of a segment lacking foundational knowledge. He noted that the weakness is not isolated to a single topic but represents a widening gap across the full landscape of everyday financial decision-making.
Financial stress is cited as a primary driver of this decline. With a third of adults struggling to make ends meet in a typical month, survival mode supplants the bandwidth required for learning. When adults do seek information, many turn to social media, which Kolluri described as engaging but rarely educational. This reliance on non-educational content coincides with increasingly complex decisions, such as choosing 401(k) investments or managing debt, where individual responsibility for retirement has increased and stakes are higher at younger ages.
Generational and gender disparities are stark. Gen Z scored the lowest among all cohorts, averaging just 38% correct answers, with more than one-third falling into the very lowest knowledge category. Women consistently scored below men, averaging 44% correct compared to 50% for men. Baby Boomers led the pack with a 54% average, followed by Gen X at 49%. Kolluri warned that low literacy at the Gen Z life stage, when demands for student loan and savings decisions begin, sets a trajectory that is difficult to reverse.
The correlation between literacy and financial stability is pronounced. Adults with very low financial literacy are four times more likely to struggle making ends meet and four times more likely to lack a month of emergency savings. On retirement-specific questions, Americans averaged only two correct answers out of six, with just 7% answering five or six correctly. Conversely, those who scored high on retirement questions were more than eight in ten to save regularly and 70% felt confident about their retirement comfort.
