By Percy A. Austin

Agenda

I. Introduction

II. Problem Statement

III. Financial barriers

II. Types of Interventions

III. Literature Review

IV. Methodology

V. Discussion

VI. Future Suggestions

Introduction

C.F.A. and F.P.A. Wealth Accumulation (dependent variable) Retirement (dependent variable) Lottery (independent variable)

Lower private saving Longer retirement periods Contribution plans

Introduction cont …

Working Definition: Financial Literacy

Problem Statement

Question: Have past or current financial literacy

initiatives modified individuals’ spending, saving or investing behavior.

Lusardi (2004) Gale and Devine (2010)

Financial literacy is essential to: making optimal financial, investment,

and retirement decisions.

Financial Barriers Income Competing obligations Inexperience Social Security Income, Withdrawals and Payouts Marital Status Asset Allocation Employment-Based Retirement Plan Participation Occupation Psychology and background

Types of Interventions

Type I One-on-one counseling, telephone advising

and computer or internet learning

Type II Seminars or presentations, training

workshops or workshop series

Type III Web-based programs, interactive CD

programs, TV programs and newsletters or papers

Literature Review

Lusardi (2004)

Gale&Levine

Discussion

Question: Why are interventions working? Structure Informed Consumers

Question: Why aren’t interventions working? Cultural differences Economic Realities

Discussion cont…

Constant theme and relationship throughout studies, financial literacy is: relatively low lack of financial knowledge Economic hardships employer-provided financial education

Future Suggestion(s)

Better information on minority participation: Hobson

More automatic enrollment: Hewitt.

More flexible rules for 401(k) loans: Towers Perrin.

Future Suggestion cont …

References Cognitive Abilities and Household Financial Decision Making by Sumit Agarwal and

Bhashkar MazumderJournal of Economic Behavior & Organization Volume 95, November 2013, Pages 159–174: “Discounting financial literacy: Time preferences and participation in financial education programs.” Stephan Meier. Charles D. Sprenger

National Institute on Retirement Security. Pgs 1-30.”The Retirement Savings Crisis: Is It Worse Than We Think.”Nari Rhee, PhD

International Journal Of Consumer Studies: Volume 36, Issue 5 September 2012.Pages 523–530Financial Literacy Education and Behavior Unhinged: Combating Bias and Poor Product Design.”Jason West

Economic Inquiry Volume 50, Issue 4, October 2012, Pages: 851–866,Title: The Role of Financial Literacy in Determining Retirement Plans: Robert Clark, Melinda Sandler Morrill, Steven G. Allen

The Economic Journal Volume 122, Issue 560, May 2012, Pages: 449–478, Maarten C.J. van Rooij.Financial Literacy, Retirement Planning and Household Wealth: Annamaria Lusardi and Rob J.M. Alessie

Association for Financial Counseling and Planning Education. (1999)Vol.10 pgs 1-11: “Cash Flow Management: A Framework Of Daily Family Activities”: Glenn Muske and Mary Winter

References cont…

www.ssa.gov www.epi.org www.pewsocialtrends.org www.census.illinois.gov/ www.illinois-demographics.com www.census.gov/ www.census.gov/history/ www.census.gov/regions/