The AARP Bulletin recently commissioned a nationwide poll to explore financial literacy on important consumer subjects among people ages 40 and older. Fifty percent of the poll respondents “failed” the financial literacy quiz, correctly answering fewer than 50% of the items. This is a troubling result considering prior research has demonstrated that financial literacy is strongly correlated with financial retirement planning, which in turn, is correlated with higher retirement wealth levels.
Additional findings include the following:
- Medicare coverage. Less than one-third (31%) of the respondents correctly identified all of the items that Medicare does not cover.
- Car buying regrets. Nearly two-thirds (63%) of the respondents incorrectly stated that federal law allows one to cancel a car purchase within three days if it was bought at a car dealership.
- Bankruptcy. Roughly one-third (32%) of the poll respondents correctly reported that bankruptcy is growing faster amongst Americans age 65 and older than any other age group.
- Social Security benefits. Only 32% of the respondents correctly reported that a person of full retirement age or older may keep 100% of his Social Security benefits even if he is currently employed, regardless of how much he earns at his current job.
This telephone poll of a nationally representative sample of 1,031 people ages 40 and older was conducted for AARP and the AARP Bulletin by International Communications Research using its national omnibus survey service between August 10th and 20th, 2007. Further information about the poll results may be obtained by contacting the report's author, Dawn V. Nelson, of AARP Knowledge Management, at (202) 434-6325. (7 pages)