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. SprengerJournal of Economic Behavior & OrganizationVolume 95Stephan MeierCharles 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 WestVolume 36, Issue 5  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. AllenRobert ClarkMelinda Sandler MorrillSteven 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…        