Americans are facing a growing money knowledge problem. A new survey shows that financial literacy in the United States has fallen to its lowest level in ten years. The finding comes at a time when managing money has become more complicated than ever.

From retirement planning to debt management, people are expected to make major financial decisions on their own. Yet many lack the basic knowledge needed to make smart choices. The latest data suggests that this gap is getting wider, not smaller.

The 2026 TIAA Institute and Global Financial Literacy Excellence Center Personal Finance Index marks a decade of tracking financial knowledge across the country. This year’s results paint a troubling picture. Adults answered just 47% of the survey’s 28 questions correctly on average.

That score is not only lower than last year, but it is also the lowest recorded since the index began. Researchers say the decline is statistically significant. More importantly, it reflects a steady increase in the number of people with very limited financial knowledge.

Back in 2017, about 20% of adults fell into the lowest literacy category. In 2026, that figure climbed to 25%. That means one in four adults struggles with basic financial concepts that affect everyday decisions.

The Weakest Link in Personal Finance

Alpha / Pexels / Survey participants answered only 36% of risk-related questions correctly. That score was the lowest among all eight financial knowledge categories measured in the study.

However, what makes this result stand out is its consistency. Younger adults struggle with risk concepts, but older adults do too. Unlike other financial topics that improve with age and experience, understanding risk remains weak across every generation.

This matters because risk touches nearly every financial decision people make. Investing, insurance coverage, emergency savings, and retirement planning all require a clear understanding of uncertainty and long-term outcomes.

Without that knowledge, people can underestimate threats or make choices that expose them to avoidable losses. Small misunderstandings today can turn into expensive mistakes years later.

The survey also highlights a serious retirement knowledge gap. On six basic retirement questions, Americans answered only two correctly on average. Just 7% managed to answer five or six questions correctly.

More than one-third of respondents could answer only one question or none at all. Those numbers suggest many people are approaching retirement without a solid understanding of the financial realities they will face.

Specific knowledge gaps reveal the depth of the problem. Only 27% correctly identified how much Medicare typically covers during retirement. Just 28% understood the likelihood that a 65-year-old will eventually need long-term care.

Financial Literacy Has Real Life Consequences

Karola / Pexels / Adults with a bachelor’s degree or higher answered 61% of questions correctly. Those without a high school diploma averaged just 30%.

Poor financial literacy is not simply an academic issue. It has a direct impact on financial well-being. The survey found that adults with low literacy scores are four times more likely to struggle to make ends meet.

They are also three times more likely to be financially fragile. In practical terms, that means they have less ability to handle unexpected expenses, income disruptions, or economic shocks.

The connection is easy to understand. People who lack financial knowledge often have trouble comparing products, managing debt, building savings, or planning ahead. Those challenges can quickly snowball into larger financial problems.

Researchers point out that financial stress creates another obstacle. When people are focused on paying bills and covering daily expenses, learning about money becomes much harder. Immediate concerns consume attention and energy.

Surya Kolluri, head of the TIAA Institute, notes that financial stress reduces cognitive bandwidth. When survival mode takes over, long-term planning often moves to the background. That leaves little room for learning new financial skills.

Gen Z adults, ages 18 to 29, recorded the lowest scores of any generation. On average, they answered only 38% of questions correctly. Baby boomers scored the highest among generations. Their average score reached 54%.

Gender differences remain significant as well. Women scored an average of 44%, while men scored 50%. The gap appeared across nearly every functional area measured in the study.