U.S. Financial Literacy Hits Decade Low as Gen Z Scores Drop to 38 Percent

American adults correctly answered only 47 percent of 28 financial literacy questions in the 2026 TIAA Institute-GFLEC Personal Finance Index, the lowest score recorded since the survey began a decade ago.

The result marks a statistically significant decline from the 2020 high of 52 percent. The proportion of Americans with "very low" financial literacy rose from 20 percent in 2017 to 25 percent in 2026.

Gen Z adults, ages 18 to 29, scored the lowest of any generation, averaging 38 percent correct. Baby boomers scored the highest at 54 percent. Women scored 6 percentage points lower than men overall, with women answering 44 percent of questions correctly compared to 50 percent for men.

Declines were recorded across five of the eight functional knowledge areas tracked by the index: consuming, borrowing, earning, insuring, and comprehending risk. Comprehending risk was the weakest area, with only 36 percent of related questions answered correctly.

Researchers point to two main causes: the increasing complexity of financial products and the spread of inaccurate financial information on social media. The consequences are significant. Individuals with lower financial literacy are four times more likely to struggle to make ends meet and three times more likely to be financially fragile.

The White House highlighted the issue in April, noting that the U.S. Department of the Treasury is expanding access to free education resources, including the FDIC's "Money Smart" program. The administration also pointed to the "Trump Accounts" initiative, a long-term savings program for children born between 2025 and 2028, as a tool to build future financial stability.

TIAA and other industry observers say employers are well-positioned to help by offering financial education through workplace wellness programs and retirement plan design.