U.S. financial literacy falls to lowest level in a decade

• Key Insight: Discover how declining financial literacy is shifting employer benefits and education strategies.
• What's at Stake: Retirement shortfalls and benefit misallocation risk rising without targeted financial education.
• Forward Look: Expect targeted, life‑stage financial education and AI tools to reshape benefits delivery.
  Source: Bullets generated by AI with editorial review

Americans' financial literacy has dropped to its lowest point in 10 years, according to a new survey from the TIAA Institute.

U.S. adults correctly answered just 47% of financial literacy questions in 2026, down 2 percentage points from the previous year and the lowest score since the TIAA Institute–GFLEC Personal Finance (P-Fin) Index began tracking the data in 2017. One-quarter of Americans now have very low financial literacy, up 5 percentage points over that period. 

The findings come at a time of elevated economic stress levels for many Americans, driven by rising gas prices and persistent inflation.

"We're also experiencing information overload from social media, which often floods the brain with stimulating, but not educational, content,"  Surya Kolluri, head of the TIAA Institute, said in an email interview. "Since COVID, overall educational attainment has declined broadly, and financial literacy has followed."

The P-Fin Index measures financial literacy using 28 questions and enables analysis of personal finance knowledge across eight areas: earning, consuming, saving, investing, borrowing and managing debt, comprehending risk and go-to information sources. This year's survey found several persistent demographic differences, including lower financial literacy among women than men. 

On average, men answered 50% of the index questions correctly, with 19% demonstrating very high financial literacy. Among women, the comparable figures were 44% and 11%, respectively. 

Read more: Employees feel bleak about their financial futures, despite robust benefits

Functional knowledge patterns are similar with women scoring significantly lower than men in all functional areas except consuming. The largest gaps were in investing, insuring and comprehending risk.

"Left unaddressed, the gender gap in financial literacy becomes a gender gap in retirement security," Kolluri said. "That matters enormously given that women on average live longer, experience more career interruptions, and may enter retirement with less accumulated savings. A one-size-fits-all approach to financial education is no longer sufficient. We need to be far more intentional about how we deliver guidance across populations."

There were also clear generational differences — especially among Gen Z, which answered just 38% of questions correctly, well below every other generation. More than one in three (37%) Gen Z adults fall into the very lowest knowledge category. 

The rise of AI as a financial tool

For the first time in the survey's history, the TIAA Institute also asked questions about AI. While 19% of adults report having used an AI tool to get information about a personal finance topic, only 4% use AI regularly to help manage their personal finances. Nine percent use it occasionally. 

AI is quickly becoming a financial tool for younger Americans. About 29% of Gen Z and 24% of millennials say they've used AI to get information about personal finance topics — far higher than the 8% of baby boomers who say the same.

Younger generations are also more likely to use AI for day-to-day money management. Roughly one in five Gen Z adults and 16% of millennials say they regularly or occasionally rely on AI to help manage their finances, compared with just 5% of baby boomers.

In a trend that remains consistent with previous years, financial well-being is strongly linked to financial literacy. Adults with low financial literacy are four times more likely to have trouble making ends meet, more than two times as likely to be debt-constrained, and three times more likely to be financially fragile. 

Read more: Employees cite finances as leading barrier to workplace well-being 

Kolluri pointed out that benefit leaders and employers can play a major role in closing these financial literacy gaps. "The challenge isn't motivation or effort," he said. "Employers are already making good-faith investments in financial education. The gap is between those efforts and the actual benefit employees receive. The key is making financial education life-stage relevant." 

"Information about paying off student loans won't resonate with a 55-year-old facing caregiving costs," Kolluri continued. "But that same 55-year-old will immediately engage with content about the financial impact of long-term care. Matching content to life stage is what closes the gap."