Financial Literacy Center Research Projects

Our projects focus on creating and tailoring materials relevant to Americans at different stages of their lives—young workers, mid-career workers, near retirees, and retirees—and evaluating their effectiveness in fostering retirement security. The Center also provides educational products for underserved populations, such as low-income, young, and disabled workers, who are particularly vulnerable during periods of financial turbulence.

Multi-Year Projects

Five Steps to Financial Planning Success

Lack of financial literacy has been shown to be a serious obstacle to financial stability. The Financial Literacy Center is using new and innovative methods such as visual tools and the power of stories and narratives to teach basic but fundamental economic concepts that are the foundation of financial decisionmaking.

Evaluating Workforce Financial Education and Encouraging New Hires to Save for Retirement

Many employers provide an orientation program to describe employee benefits, including retirement plans, to new hires, but can these programs and materials increase the likelihood that new workers will enroll in a retirement saving plan?

Encouraging Better Financial Decisionmaking Among Low-Income and Minority Groups

Building on two video games it designed to build financial skills among low-income women, the Financial Literacy Center is now re-creating those games for Spanish-speaking players.

Do "Financial Health" Checkups Prompt Behavioral Changes?

Working with a credit union, Financial Literacy Center researchers are piloting a voluntary, in-person annual "financial health check" service with follow-up, to help households improve their financial decisions. The project is also testing the pilot's effects on behavior.

What Are the Real-World Framing Influences on Retirement Claiming Behavior?

Research suggests that many individuals claim Social Security retirement benefits at younger ages than may be optimal. The Financial Literacy Center is evaluating alternative ways to convey information about when to claim benefits and offering advice to enhance the Social Security Administration's online claiming website.

Demonstrating the Returns to Work for Children after SSI

When children with disabilities turn 18, most apply for SSI-disabled adult benefits without first looking for work. The Financial Literacy Center is developing a financial literacy tool for these young adults to teach the value of entering the labor market.

Year Two Projects

Refining and Evaluating a Financial "Bootcamp" for Women

Women continue to lag behind men, not only in income, but in overall financial capability and retirement preparedness. A financial "bootcamp" may hold promise as a financial education program for early to mid-career women.

Effects of Lifetime Income Disclosure on Retirement Saving

People have difficulty understanding how much money they must accumulate in their working years to create a sufficient stream of income once they retire. The Financial Literacy Center is exploring whether disclosing information about the monthly retirement income stream resulting from an individual's retirement account will change savings behavior.

Building Financial Literacy for K-8 Pre-Service Teachers and Adult Learners

The Financial Literacy Center is developing and testing college curricula for financial literacy instruction, suitable for adult learners and pre-service K–8 teachers. The goal of this project is to educate as many young people and adults as possible in financial matters.

Raising Awareness of Tax-Time Saving Options

Financially vulnerable Americans often have limited awareness of tax-time savings tools. The Financial Literacy Center has developed and is evaluating a video game and national marketing effort to encourage lower-income Americans to take advantage of the government's tax policies.

Informing the Choice Between Lump Sums and Retirement Annuity Payouts

Households annuitize very little of their retirement savings. The Financial Literacy Center is studying the annuitization choices of retiring workers, designing and implementing new communication strategies that will raise acceptance of annuities, and examining the effectiveness of these strategies.

Understanding How People Value the Social Security Annuity

Currently, few Americans opt to annuitize their Social Security payments. A better understanding of individuals' preferences for annuitization, obtained via a stated-preference survey, can inform the debate on Social Security reform.

Barriers to Immigrant Use of Financial Services

Hispanic immigrants constitute a rapidly growing share of the U.S. population but are less likely to be financially literate than natives. RAND researchers are investigating barriers to Hispanic immigrants' use of financial services and evaluates financial education materials for them.

Does 401(k) Auto-Enrollment Help Low-Income Households?

People with low levels of financial literacy are more easily influenced by the default settings of employee savings plans. The Financial Literacy Center is measuring differences in default effects for employees at companies with auto-enrollment retirement plans, focusing on differential behavior by income.

Understanding the Geography of Financial Literacy in the U.S.

Results from the National Financial Capability Survey show the majority of Americans lack basic numeracy and knowledge of fundamental economic principles. The Financial Literacy Center is analyzing the raw survey data to construct an atlas of financial literacy among U.S. states and among some demographic groups.

Can Commitment Savings Help Americans Be Better Prepared for Retirement?

Many households use commitment devices such as monthly mortgage payments, Social Security, and payroll 401(k) deductions to help them save. The Financial Literacy Center is trying to design a "new and improved" 401(k) that offers a better combination of liquidity and commitment than the current defined contribution pension.

Optimal Knowledge and Saving for Retirement

dropping coin in piggy bank

The researchers are developing a life-cycle model that includes the role of financial knowledge in the accumulation of wealth, a project that should help policymakers target efforts to boost financial literacy.

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How Financial Advisors Influence Social Security Claiming

financial advisor with middle-aged couple

This project is gathering information on how financial advisors and retirement plan providers discuss Social Security claiming ages with their clients.

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Improving Understanding of Retirement Health Care Expenditures

nurse checks older hospital patient

This work is using a survey of people ages 50-75 to assess expectations of retiree health care expenses. To the extent that respondents underestimate these costs, the analysts will consider how to address this problem.

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Year One Projects

What Do People Know About Social Security Benefits?

picture of a social security card

This study is assessing the public's understanding of retirement planning in general and the role of Social Security benefits in particular.

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Defaulting on Yourself: Who Loses at 401(k) Loans?

a man stacking financial blocks

This research analyzes the advantages and disadvantages of the loan feature of 401(k) plans, particularly the extent of defaults, the conditions that lead to them, and their costs in terms of well-being in retirement.

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Enhancing the Social Security Statement

a retired couple reviewing bills and statements at a table

This study is assessing whether knowledge of Social Security benefits have improved or declined since the Statement began national distribution in 1995, and will consider how to improve public understanding in the future.

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Learning from Your Peers: New Ways To Encourage Saving

two men talking at a water cooler

Researchers are developing a tool that allows employees to compare their savings and retirement contributions with those of thousands of their peers.

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