About ICIAbout This SiteSearch This SiteYour FeedbackHome
Confront The Savings Crisis Investor Education Federal Solutions Needed Now One Sensible Solution You Can Make A Difference What Others Are Saying
Financial LiteracyPersonal Savings  



What Others Are Saying

A selection of research studies and reports are featured below. The first section focuses on financial literacy in America. The second section highlights research from the Investment Company Institute or ICI members examining personal savings issues. Links are provided for those resources freely available on the web.

Financial Literacy Research

Delivery of Financial Literacy Programs
A report of focus group research on delivering financial education programs. (Maude Toussaint-Comeau and Sherrie L.W. Rhine, December 2000)

—Federal Reserve Bank of Chicago

Financial Literacy: An Overview of Practice, Research, and Policy
“… many challenges remain in identifying the most effective and most efficient means of providing relevant information to educate consumers at appropriate points in their financial life cycle.” (Sandra Braunstein and Carolyn Welch, November 2002)

Financial Education and Private Pensions
“… exposure to financial education—both at the workplace and in high school—improves a respondent’s knowledge of relative asset returns and their understanding of the features of their pension plan.” (Dean M. Maki, January 2001)

—Federal Reserve Board

Goodbye to Complacency: Financial Literacy Education in the United States 2000-2005
Updates the study undertaken in 2000 (see below). “The nation’s financial education advocates and educators have made much progress during the past five years. Helping people transition from dependency to self-reliance, however, is not an easy task. Research to date and the experience of extant program managers and educators demonstrate that it is a worthwhile and achievable objective. The challenge for private interests, policymakers, and community organizers is to press on even in the face of seeming complacency. There is much evidence that future individual, family, and national well being depends upon the success of widespread financial education endeavors during the coming years.” (Lois A. Vitt, Gwen M. Reichbach, Jamie L. Kent, Jurg K. Siegenthaler, 2005)

Personal Finance and the Rush to Competence: Financial Literacy Education in the U.S.
Examines 90 personal financial education programs (community, federal, military, faith-based, workplace, and college) and 150 websites; identifies seven elements of effectiveness. (Lois A. Vitt, Carol Anderson, Jamie Kent, Deanna M. Lyter, Jurg K. Siegenthaler, and Jeremy Ward, 2000)

—Institute for Socio-Financial Studies

Principles and Best Practices for Investor Education
“… educating consumers so that they are able to obtain the understanding, skills and knowledge necessary for them to become informed investors is critical for their own financial security and for the continued growth and stability of securities markets.” (January 2004)

—International Council of Securities Associations

Education and Saving: The Long-Term Effects of High School Financial Curriculum Mandates
State mandates for high school financial education “have significantly raised both exposure to financial curricula and subsequent asset accumulation once exposed students reached adulthood.” (B. Douglas Bernheim, Daniel M. Garrett, and Dean M. Make, June 1997)

—National Bureau of Economic Research

Financial Literacy in America: Individual Choices, National Consequences
“Because of the changing nature of the nation’s economy, Americans must acquire the financial knowledge necessary to effectively manage their own finances…. A joint effort is necessary to achieve national financial literacy. No single organization or sector can achieve the goal of providing financial literacy for all Americans. Working together is the only viable solution.” (October 2002)

—National Endowment for Financial Education

Improving Financial Literacy: Analysis of Issues and Policies
This report analyses financial literacy surveys in OECD member countries; highlights the economic, demographic, and policy changes that make financial education increasingly important; describes the different types of financial education programmes currently being offered; evaluates their effectiveness; and suggests actions policymakers can take to improve financial education and awareness. (October 2005)

—Organisation for Economic Co-operation and Development

Ignorance Is Not Bliss: The Importance of Financial Education
“… financial education can produce significant changes in how individuals think about and plan for retirement.” (Robert L. Clark and Madeleine d’Ambrosio, December 2003)

Effects of Financial Education Intervention on Attitudes Toward Saving for Retirement
“… both personality constructs and financial knowledge [are] significant predictors of pre-retirement planning.” (Doug Hershey and John Mowen, June 2000)

—TIAA-CREF Institute

Integrating Financial Education into School Curricula
“Integrating financial education into required reading and mathematics courses ensures that financial skills are taught and reinforced year after year, with fewer resources than would be required if financial education courses were to be offered separately.” (October 2002)

—U.S. Department of Treasury Office of Financial Education

Hearing on “Financial Literacy Education: What Do Students Need to Know to Plan For the Future?”
Testimony from the National Council on Economic Education, Securities Industry Foundation for Economic Education, and others. (October 2003)

—U.S. House Committee on Education and the Workforce

Hearing on “The State of Financial Literacy and Education in America”
Testimony from AARP, the American Savings Education Council, Consumer Federation of America, and others. (February 2002)

—U.S. Senate Banking Committee

Hearing on “The Federal Government’s Role in Empowering Americans to Make Informed Financial Decisions”
Testimony from Treasury, Education, the Securities and Exchange Commission, and others. (March 2004)

—U.S. Senate Governmental Affairs Committee

Survey of Financial Literacy in Washington State: Knowledge, Behavior, Attitudes, and Experiences
“ The extent to which an individual demonstrates financial knowledge, more financial experience, and more positive protective type financial behaviors predicts the extent to which they would be more financially literate and more effective in their financial management.” (Danna Moore, December 2003)

—Washington State University

Evaluating Your Financial Literacy Program: A Practical Guide
Checklists and questionnaires to help evaluate financial literacy programs. (Katy Jacob, October 2002)

—Woodstock Institute

Research from the Investment Company Institute and Institute Members Related to Personal Savings in America

Survey Shows Broad Support for Passage of H.R. 2121 as Investment Firms Ready Cap Gains Distribution Estimates
“A new survey shows that nearly half of all Americans support legislation to change the tax code so that fund investors with taxable accounts will be able to defer taxes on reinvested distributions until fund shares are sold.” (September 2005)

Americans Favor Permanent Tax Benefits for 529 Plans, According to Survey
“Three-quarters (76 percent) of all Americans support making the tax-free withdrawal benefit of 529 college savings plans permanent.” (April 2004)

—American Century and Opinion Research Corporation

U.S. Workers Confident – But Not Well-Informed – About Retirement Income
“...nearly 65 percent of America's working respondents plan to rely on their own retirement savings or income sources rather than Social Security or pensions,” a global survey from AXA Equitable finds. “High expectations for retirement income may influence U.S. workers' hopes to continue working in retirement, as 63 percent of those surveyed desire to hold a paid job once retired.” (January 2006)

—AXA Equitable

Schwab Survey Reveals New Insights Into Money Behavior and Concerns of Teens
This annual “Teens & Money” survey finds that “teens are growing increasingly more active as financial consumers and have strong fundamental values about money, but are in urgent need of learning more of the ABCs of money management to temper their new forays into the world of credit and debt.” (April 2006)

—Charles Schwab Corporation

Investors Place Record High Importance on Effect of Taxes on Returns and Support Tax Cut Extensions
More than half the investors surveyed in Eaton Vance’s seventh annual nationwide survey believe the economy would be hurt by a failure to extend the 2003 Tax Act beyond 2008, when some of its provisions are set to expire. “If investors are hit with substantial capital gains this year, their enthusiasm for continued capital gains tax relief could well build into a march on Washington come tax time.” (December 2005)

—Eaton Vance

Fidelity Estimates $200,000 Now Needed To Cover Retiree Health Care Costs
In its latest annual calculation, Fidelity estimates that a 65-year-old couple retiring today will need $200,000 to cover medical expenses in retirement. The estimate does not include any long-term care costs and assumes the couple has no employer-sponsored retiree health care. (March 2006)

New “Fidelity Retirement Index” Reports America's Retirement Readiness
“The new “Fidelity Retirement Indexes” revealed that the typical working American household, whose primary decision-makers are age 43 on average, has saved $18,750 for retirement and is expecting to cover the majority of retirement expenses through Social Security and pension benefits. By itself, retirement savings may only provide 10 percent to 20 percent income replacement.” (June 2005)

—Fidelity Investments

Emotions and Human Impulses Drive Retirement Investment Decisions
In a report entitled, “Psychology, Emotion, Investing and Retirement: Exploring Participant Behavior in Defined Contribution Plans,” ING discusses steps employers can take to help 401(k) plan participants make better investment decisions. (February 2006)

Consumers Say Financial Services Should be Easier
Among other findings, a survey sponsored by ING and conducted by Roper reveals that nearly half of those surveyed believe that retirement planning is more difficult than parenting. When asked how managing their money could be made easier, survey respondents asked for clear, straightforward information coupled with an understanding of their individual needs and products and services to meet those needs. (November 2005)


401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2004
This research concludes that “consistent participation in 401(k) plans remains essential to successful saving.” The study also notes that, although widely available, 401(k) plan loans are rarely used and that lifestyle and lifecycle funds are increasing in popularity both among plan sponsors and plan participants. (September 2005)

The Influence of Automatic Enrollment, Catch-Up, and IRA Contributions on 401(k) Contributions at Retirement
Among other findings, this research concludes that “under a wide range of scenarios, workers can save enough through 401(k) plans over a full career to replace a significant portion of their pre-retirement income in retirement” and that “automatic enrollment in 401(k) plans increases participation rates dramatically, particularly among lower income workers.” (July 2005)

The Individual Retirement Account at Age 30: A Retrospective
“IRAs [are] the largest component of the $11.6 trillion U.S. retirement market….Experience from changing the rules governing IRAs shows that individuals respond to incentives that encourage the use of IRAs to build retirement assets.” However, “Incentives work best when rules, structure, and provisions are simple, understandable, and predictable.” (February 2005)

Profile of Households Saving for College
Nearly two thirds of parents participating in this survey are saving to pay for their children’s college educations, more than 90% are using taxable investments to do so, and their “use of education-targeted savings programs is likely to grow in the near future.” (October 2003)

—Investment Company Institute

Counting Their Nest Eggs Before They Hatch
Among other findings, this survey shows that pre-retirees are overestimating projected retirement assets. “Today’s pre-retirees seem to be basing their nest egg calculations on ‘aspiration’ rather than ‘reality.’” (November 2005)

—MainStay Investments

The MetLife Retirement Income Decisions Study
Examines retirement income behaviors and attitudes among the “Silent” Generation. “Perhaps the last generation to rely heavily on pension plans and Social Security benefits, a large majority of them were able to retire before the age of 65.” (June 2005)

—MetLife Mature Market Institute and Mathew Greenwald & Associates

Regrets About Retirement Savings? You’re Not Alone
A nationwide survey of Baby Boomers reveals that Boomers “have unrealistic expectations when it comes to retirement: they regret how they’ve saved yet expect a comfortable retirement lifestyle.” (March 2005)

Women Are More Confident In Their Investing Abilities But Many of Those Surveyed Lack Understanding of Investment Vehicles
“Despite feeling more knowledgeable than they did five years ago, 80% of women surveyed wish they had learned more about investing growing up.” (November 2004)

—OppenheimerFunds, Inc.

Financial Experience and Behaviors Among Women
A survey of 1,000 American women aged 25-68 with an average household income of $50,000 concludes their lives are “a balancing act,” often resulting in “inaction when it comes to financial decision making.” Today’s women are very aware of the importance of financial and retirement planning. However, “awareness and basic knowledge are not inspiring women to take the appropriate actions that will help ensure they maintain their desired lifestyle....” (June 2006)

Reinventing the Defined Contribution Plan: Research, Analysis and Recommendations
“By simplifying plan design, using the best elements of the traditional defined benefit model, educating participants on generating retirement income, and delivering retirement-income solutions, plan sponsors can help dramatically improve retirement outcomes for their employees.” (February 2006)

Roadblocks to Retirement
“Americans today face a new set of challenges in reaching their long-term retirement goals. As a nation of consumers and borrowers, they are haunted by a persistent focus on short-term spending and gratification.” (2005)

—Prudential Financial

A Profile of Financial Maturity
This study identifies six beliefs and habits for achieving financial security: 1) realistic expectations, 2) resisting the temptation for quick rewards and fads, 3) patience in the face of adversity, 4) greater satisfaction from saving rather than from spending, 5) ability to tolerate above-average risk, and 6) receptivity to advice on how to save and invest. (April 2006)

The Truth about Retirement: Advice from the Recently Retired
“[M]any retirees were surprised to discover that they had lower incomes and higher expenses than they had anticipated.... their biggest regret was not saving earlier in life and saving more along the way.” (November 2004)

—Putnam Investments

Retiree Health Care: Individuals Picking Up Bigger Tab
“Today’s seniors each spend, on average, more than $9,200 per year on health care costs. Individuals need to be as informed as possible about their options and plan ahead for funding retiree health care.” (Marilyn Moon, July 2005)

College Savings Options and the Impact of Savings on Financial Aid
“[T]he impact of parental savings on student’s financial aid is likely to be much smaller than was previously estimated.” (Jennifer Ma, March 2005)

Understanding The Impact of Employer Matching on 401(k) Saving
“[E]mployer matching significantly raises 401(k) saving: doubling the match rate would raise employee contributions by 25 percent.” (Gary Engelhardt and Anil Kumar, June 2003)

—TIAA-CREF Institute

Turning Workers into Savers? Incentives, Liquidity, and Choice in 401(k) Plan Design
Given workers’ indifference to retirement savings incentives, the results of this research “underscore the need for alternative approaches beyond matching contributions, if retirement saving is to become broader-based.” (November 2005)

Catch-up Contributions in 2004: Plan Sponsor and Participant Adoption
“Only 13% of eligible plan participants made a catch-up contribution in 2004….For plan sponsors and providers, these results underscore the importance of general retirement savings education and the value of new automatic savings increase features within DC plans.” (April 2005)

Expectations for Retirement: A Survey of Retirement Investors
“There is a fundamental misalignment between retirement goals and current assets and savings rates….About one-third of retirement investors are “on track”—likely to generate an income replacement ratio of 70% or greater in retirement.” (November 2004)

Lessons from Behavioral Finance and the Autopilot 401(k) Plan
“Research from the field of behavioral finance suggests that many defined contribution plan participants are not active, self-motivated decision-makers, as is often assumed….the autopilot 401(k) addresses the needs of these reluctant savers.” (April 2004)

—Vanguard Center for Retirement Research