The 2020 TIAA Institute-GFLEC Personal Finance Index: Introduction

Financial literacy is knowledge and understanding that enable sound financial decision making and effective management of personal finances. Thus, an individual’s financial wellness depends, at least in part, on his or her financial literacy.

What is the state of financial literacy among U.S. adults? Are there areas where knowledge is particularly strong, as well as areas where it is particularly weak? How does financial literacy vary across different segments of the population? In addition, importantly, how does financial literacy correlate with personal finance behavior and outcomes, and ultimately with financial well-being?

The TIAA Institute-GFLEC Personal Finance Index (P-Fin Index), a long-term project begun in 2017 to annually assess financial literacy among the U.S. adult population, answers these questions and more.1 It relates to common financial situations that individuals encounter and can be viewed as a gauge of “working knowledge.” The index is unique in its capacity to produce a robust measure of overall personal finance knowledge and a nuanced analysis of knowledge across eight areas of personal finance in which individuals inherently function. The index is based on responses to 28 questions,2 with three or four questions for each functional area3:

1. Earning—determinants of wages and take-home pay.
2. Consuming—budgets and managing spending.
3. Saving—factors that maximize accumulations.
4. Investing—investment types, risk and return.
5. Borrowing/managing debt—relationship between loan features and repayments.
6. Insuring—types of coverage and how insurance works.
7. Comprehending risk—understanding uncertain financial outcomes.
8. Go-to information sources—recognizing appropriate sources and advice.

The P-Fin Index survey also collects information about household finances and financial behaviors. This enables us to examine the relationship of financial literacy with measures of financial wellness.

The 2020 survey was completed online in January by a sample of 1,008 U.S. adults, ages 18 and older.4 The sample was weighted to be nationally representative. Table A1 in Appendix A provides the weighted distribution of respondents across various demographics.


Several items are new with the 2020 P-Fin Index:

  • Respondents were asked the functional areas where they consider their financial literacy to be strongest and weakest.

  • Respondents were asked how much time they spend thinking about and dealing with issues and problems related to their personal finances, including time spent doing so while at work.

  • Gen Z was quota-sampled, enabling cross-generational examination of financial literacy among baby boomers, Gen X, Gen Y (millennials) and Gen Z.5

  • Several new indicators of financial wellness were included.


This report:

  • Examines financial literacy and functional knowledge among the U.S. adult population and across various demographic subgroups, including generations.

  • Compares financial literacy across four years, since the start of the data collection.

  • Analyzes the link between financial literacy and various indicators of financial wellness, including time spent dealing with personal finance issues and problems.

In addition, this year’s survey oversampled women, enabling analysis of the female population in a follow-up report.

1 See Lusardi, Oggero and Yakoboski (2017) and Yakoboski, Lusardi and Hasler (2018, 2019).
2 Each question is multiple choice with four response options: the correct answer, two incorrect answers and a “don’t know” option.
3 These areas correspond to the National Standards for Financial Literacy outlined by the Council for Economic Education. See http://councilforeconed.org/resource/national-standards-for-financial-literacy/.
4 The sample was drawn from Ipsos’ KnowledgePanel, a large-scale probability-based online panel.
5 Quota sampling targeted 200 completed surveys from both Gen Z and Gen Y respondents. The 1,008 respondents consisted of 196 Gen Z (born 1997-2002), 204 Gen Y (1981-1996), 210 Gen X (1965-1980), 326 baby boomers (1946-1964) and 72 members of the Silent Generation (1929-1945). Due to small sample size, the Silent Generation is not included in the generational analysis; its members are included in all other tabulations in this report.

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