1. By Percy A. Austin

2. Agenda I. Introduction II. Problem Statement III. Financial barriers II. Types of Interventions III. Literature Review IV. Methodology V. Discussion VI. Future Suggestions

3. 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

4. Introduction cont … Working Definition: Financial Literacy

5. 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.

6. 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

7. 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

8. Literature Review Lusardi (2004) Gale&Levine

9. Discussion Question: Why are interventions working?  Structure  Informed Consumers Question: Why aren’t interventions working?  Cultural differences  Economic Realities

10. Discussion cont… Constant theme and relationship throughout studies, financial literacy is:  relatively low  lack of financial knowledge  Economic hardships  employer-provided financial education

11. Future Suggestion(s)  Better information on minority participation: Hobson  More automatic enrollment: Hewitt.  More flexible rules for 401(k) loans: Towers Perrin.

12. Future Suggestion cont …

13. 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

14. References cont…  www.ssa.gov www.ssa.gov  www.epi.org www.epi.org  www.pewsocialtrends.org www.pewsocialtrends.org  www.census.illinois.gov/ www.census.illinois.gov/  www.illinois-demographics.com www.illinois-demographics.com  www.census.gov/ www.census.gov/  www.census.gov/history/ www.census.gov/history/  www.census.gov/regions/ www.census.gov/regions/