U.S. Adults Flunk Major Financial Literacy Test

Managing money in a marriage isn't just about budgeting or saving—it's about making informed decisions together. Yet, according to the 2025 TIAA Institute-GFLEC Personal Finance Index, most American adults are under-equipped to do just that. 

U.S. adults flunked a major financial literacy test, only correctly answering 49% of questions. 

For couples, this knowledge gap can lead to increased stress, reduced security, and missed opportunities to establish a solid financial foundation.

The Key Data (The Good, the Bad, and the Ugly)

The Good

There is none. Nothing. Nada. 

Folks from all walks of life failed miserably, and some of the questions shared were not difficult. 

The Bad

• The average score on the 28-question P-Fin Index: 49% correct

• Borrowing and debt management was the strongest content area, with 59% accuracy

• On average, adults got just 2 out of 6 retirement questions right. 

  
  

The Ugly

• Only 48% of adults got more than half of the questions right

• Comprehending risk was the weakest content area—only 36% answered correctly

• Only 7% of people answered five or six of the retirement questions correctly.

The Consequences Are Real

Low financial literacy isn’t just a trivia problem—it’s a life problem. Adults with very low financial literacy are:

• Twice as likely to be debt-constrained

• Three times more likely to be financially fragile

• Five times more likely to lack even a month’s worth of emergency savings

• Eight times more likely to spend 20+ hours per week dealing with financial problems

And these consequences ripple into relationships. Time spent stressing about money is time not spent enjoying your partner. Debt, confusion about benefits, or a lack of a shared financial plan can create resentment, anxiety, or worse.

3 Retirement Fluency Questions

Here are the three questions used to assess retirement fluency in the study.

Try answering these questions yourself and check your answers at the end of the article.

1. Which statement about Social Security is false?

A. Benefits depend on the last two years of earnings

B. Disabled workers may receive benefits

C. Benefits last for life

D. Don’t know

2. Latisha saves $2,000. Her employer offers a 401(k) with a match. Which option earns her the most?

A. 401(k) with 5% return

B. IRA with 5% return

C. They’re equal

D. Don’t know

3. What are the odds a 65-year-old will need long-term care?

A. 30%

B. 50%

C. 70%

D. Don’t know

3 Suggestions for Couples to Manage Money as a Team

The data may seem bleak, but it offers a roadmap for action. Here are steps couples can take to grow together financially:

1. Learn, Share, and Grow Together

We are seeing momentum across the country of more states requiring a personal finance class to graduate. Still, we have decades before we catch up. 

Couples must continue to learn and talk about money with one another. And the fact is that 62% of Americans don't talk about money. A great place to start is to schedule a Money Date with your spouse and establish financial literacy learning goals.

2. What, How, and Who You’re Learning From Matters a Lot

Reddit and social media are a cesspool for financial literacy lessons. Yes, there is high-quality, sound advice out there, but if you're not financially literate, you can't be certain what you can and can't trust. 

I served a one-year term as a Visiting Scholar at the Consumer Financial Protection Bureau Office of Financial Education. I can say firsthand that the free resources they provide are second to none. Start your learning journey by focusing on material that is relevant to your life right now.

3. Seek Professional Support

As an Accredited Financial Counselor® who supports individuals with their money management challenges, I have been heartbroken by the stories people share, highlighting challenges that could have been prevented if they had sought professional support earlier. 

What was stopping most of them? 

Shame. And this breaks my heart. 

I have successfully advocated for personal finance as a graduation requirement in various states because any system that fails to prepare students for the financial world is a failing system.

Never feel shame for failing at financial literacy; it's the system that failed you. 

Please click here and reach out if you are looking for professional support. Below is a big about my background.

Answers: 3 Retirement Fluency Questions

1. Which statement about Social Security is false?

A. Benefits depend on the last two years of earnings [Correct Answer]

B. Disabled workers may receive benefits

C. Benefits last for life

D. Don’t know

Explanation: Social Security benefits are calculated based on a worker’s highest 35 years of earnings, not just the last two years. The Social Security Administration indexes these years for inflation and uses them to determine your average indexed monthly earnings (AIME), which affects your benefit amount.

2. Latisha saves $2,000. Her employer offers a 401(k) with a match. Which option earns her the most?

A. 401(k) with 5% return [Correct Answer]

B. IRA with 5% return

C. They’re equal

D. Don’t know

Explanation: Latisha earns the most by contributing to the 401(k) with a match, because she receives “free” money from her employer on top of her $2,000 contribution. Even if both accounts earn the same 5% return, the employer match significantly boosts her total savings. 

3. What are the odds a 65-year-old will need long-term care?

A. 30%

B. 50%

C. 70% [Correct Answer]

D. Don’t know

Consider this: Planning for long-term care is essential to avoid draining retirement savings or placing caregiving stress on a partner. Options like long-term care insurance, hybrid policies, or setting aside savings can help protect both your finances and your relationship.

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