Americans' financial literacy slumps to a 10-year low

Americans' understanding of basic financial concepts has fallen to a 10-year low, raising concerns that households are becoming less prepared to manage debt, savings and retirement decisions, according to a new study from investment giant TIAA and Stanford University's Global Financial Literacy Excellence Center.

In 2025, U.S. adults correctly answered only 47% of the 28 questions used to assess financial literacy, down from a high of 52% in 2020 and the lowest score in the decade since the survey began. The decline was driven by a growing share of Americans with very low financial literacy, which has jumped to 25% this year from 20% a decade ago, the study found.

The findings are troubling because low financial literacy is linked with worse outcomes, such as carrying higher levels of debt, Surya Kolluri, the head of TIAA Institute, told CBS News. The survey didn't examine why scores declined, but he said possible factors include misleading financial information on social media, weaker overall literacy and the financial strains many households already face.

"Those with lower levels of financial literacy are four times more likely to have trouble making ends meet," Kolluri said.

Women and younger adults scored lower than other groups. Women answered 44% of the questions correctly, compared with 50% for men. Gen Z adults, ages 18 to 29, had the lowest score of any generation, at 38%, while baby boomers had the highest, at 54%.

The generation gap is partly due to Gen Z's age, as many aren't likely to be well-versed in the retirement topics addressed in the survey. But Kolluri also suspects it could be due to financial pressures on young people, such as high student debt and a sense that buying a home may be out of reach.

Economists and experts also point to a broader problem: Should the burden of knowledge be placed on consumers, or should the complex financial system be overhauled to make it easier for people to understand what they're buying or signing for? Blaming consumers for failing to understand increasingly complicated products may miss the real problem, they argue.

As two economists, Harvard University's John Campbell and Imperial College London's Tarun Ramadorai, wrote in a 2025 book, the U.S. retirement system "appears too complex for many people to understand."

Still, although financial services have become markedly more complex, many of the basic concepts remain the same, said LendingTree chief consumer finance analyst Matt Schulz.

"Sure, plenty has changed in the last decade or more in the financial services space, but the fundamentals of financial knowledge really haven't," he said. "The fact that people are faring worse and worse on these kinds of tests is troubling, for sure."

Schulz thinks the decline could be due to the surge of financial information on social media, much of it inaccurate. Consumers without a grasp of the basics may struggle to distinguish good advice from bad.

"Knowing what financial content to follow and trust has never been harder," he said. "There's an enormous amount of really smart and insightful personal finance information out there, but there's also a sea of garbage, and if you don't know the difference, it can cost you."

Financial industry critics also contend that companies including banks, credit card issuers, insurance companies and other firms often deliberately complicate their products, burying key details in the fine print or lengthy disclosure statements. Many personal finance decisions, such as buying a home or planning for retirement, also involve sums of money well beyond what people are used to dealing with.

TIAA released eight questions from its financial literacy test. See if you can answer them correctly.

1. Mark's salary has increased over the past two years. What would be a plausible reason for this?A. The number of workers with Mark's skills increased where he lives and worksB. New technology reduced the demand for workers with Mark's skillsC. Mark completed several training courses at a local college

D. Don't know