Americans' financial literacy has slipped to its lowest level in a decade, according to the 2026 TIAA Institute-GFLEC Personal Finance Index released this month.
U.S. adults correctly answered just 47% of the 28 P-Fin Index questions in 2026 — a significant drop from the prior year and the weakest result since the survey launched in 2017. The figure has never exceeded 52% over the decade.
The share of adults with very low financial literacy (seven or fewer questions correct) rose from 20% in 2017 to 25% in 2026. The top of the distribution barely moved: just 15% answered 22 or more correctly, down one point from 2017.
Scores fell in five of the eight subject areas tested: consuming (-5 percentage points), borrowing, earning, insuring, and comprehending risk (-3 points each).
Gen Z Is The Weakest Cohort
Gen Z correctly answered only 38% of questions, well below Millennials (46%), Gen X (49%), and Baby Boomers (54%).
More concerning: 37% of Gen Z fall into the very-low-literacy bucket — the largest single segment within that generation.
Women continued to score lower than men, answering 44% versus 50% of questions correctly. Comprehending risk remains the weakest area across every demographic, with only 36% of risk-related questions answered correctly.
A Growing Reliance On AI
The 2026 survey asked about artificial intelligence for the first time. 19% of adults have used an AI tool (ChatGPT, Gemini, Claude, or a bank chatbot) to get personal finance information. Only 4% use AI regularly to manage their finances and 9% use it occasionally.
Younger Americans are the heaviest users: 30% of Gen Z and 24% of Millennials have turned to AI for finance questions, compared with 8% of boomers. AI use is also positively correlated with financial literacy: 26% of high-literacy adults use AI tools, versus 14% of low-literacy adults.
However, as The College Investor has reported before, AI answers in personal finance are incredibly unreliable. Last year the study noted that 37% of Google's AI Overview answers in personal finance were incorrect.
Why It Matters
The report links low financial literacy to measurable harm. Compared with high-literacy adults, those with very low scores are:
- 4x more likely to have trouble making ends meet
- 3x more likely to be financially fragile (unable to cover a $2,000 emergency)
- 4x more likely to lack one month of emergency savings
- 3x+ more likely to spend 10 or more hours per week on personal finance issues
Retirement readiness looks similarly weak. Adults averaged just 2.2 correct answers out of six retirement-related questions covering Social Security, Medicare, lifetime income, long-term care, and life expectancy. Only 7% answered five or six correctly.
How This Connects
The findings land as 28 states have now passed laws requiring high school students to take a personal finance course to graduate — up from just eight a few years ago.
But only 10 of those 28 states have fully implemented the requirement, meaning most current Gen Z adults graduated without mandatory instruction. The TIAA data suggests that gap is showing up in early-adult outcomes.
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Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.