5 Key Findings from the 2022 TIAA Institute-GFLEC Personal Finance Index

5 Key Findings from the 2022 TIAA Institute-GFLEC Personal Finance Index

The 2022 TIAA Institute-GFLEC Personal Finance Index has just been released, shedding light on American adults’ financial literacy. The study surveyed over 10,000 American adults and tested their knowledge of a variety of financial topics, including loans, interest rates, risk management, and financial planning. The results of the study reveal some critical findings that can help people better understand their financial health.

Here are five key findings from the 2022 TIAA Institute-GFLEC Personal Finance Index:

1. Less than half of American adults are financially literate.

According to the study, only 44% of American adults are proficient in financial literacy. The study defines financial literacy as having knowledge and understanding of four key financial concepts: interest rates, inflation, risk diversification, and compound interest. This finding is significant because it highlights the need for increased financial education among Americans, particularly with regards to these four key concepts.

2. Women are less financially literate than men.

The study found that men are more financially literate than women. Specifically, 56% of men are proficient in financial literacy, compared to only 33% of women. This finding is concerning because it highlights a gender gap in financial literacy, which could have significant implications for women’s financial health.

3. Millennials are the least financially literate generation.

The study found that millennials (those born between 1981 and 1996) are the least financially literate generation. Only 25% of millennials are proficient in financial literacy, compared to 48% of baby boomers (those born between 1946 and 1964) and 44% of Gen Xers (those born between 1965 and 1980). This finding is significant because millennials are facing unique financial challenges, such as high levels of student loan debt and a challenging job market, which could make financial literacy essential for their financial success.

4. Income and education are strongly correlated with financial literacy.

The study found that income and education are strongly correlated with financial literacy. Specifically, those with higher incomes and more education are more likely to be financially literate than those with lower incomes and less education. This finding highlights the importance of financial education for people from all income brackets and levels of education.

5. Financial literacy is closely tied to financial outcomes.

The study found that financial literacy is closely tied to financial outcomes. Specifically, those who are more financially literate tend to be better at managing their finances, have more savings, and have higher credit scores. This finding underscores the importance of financial literacy for people who want to improve their financial health and achieve their financial goals.

In conclusion, the 2022 TIAA Institute-GFLEC Personal Finance Index reveals some critical findings about Americans’ financial literacy. While there is cause for concern, particularly with regards to gender and generational gaps in financial literacy, the study also highlights opportunities for improvement. By increasing financial education and promoting financial literacy, we can help more Americans achieve their financial goals and improve their financial health.