A new study from scholars at the University of Pennsylvania’s Wharton School, the Rush Alzheimer’s Disease Center, and the FINRA Investor Education Foundation has identified a pattern of declining financial and health literacy among older men and women, with women consistently demonstrating lower literacy as they age.
For their study, the authors annually assessed financial and health literacy for over 1,000 community-resident older adults without dementia for up to 12 years. The participants completed a 32-item questionnaire that measured their numeracy skills; knowledge of financial terms, institutions, and investments; and knowledge of health information and concepts. At baseline, the average literacy score for all participants was 69.6 percent. However, men averaged 3.6 percentage points higher than women at baseline. Notably, this gender gap did not change over the course of the study, with 87 percent of all respondents demonstrating declining financial and health literacy. The average rate of decline for both men and women was about 1 percentage point per year.
Since both men and women experience similar rates of decline, the findings suggest efforts to improve financial and health literacy among older adults would benefit everyone’s baseline literacy. However, considering that women have a longer average lifespan than men, their lower financial and health literacy, combined with their greater potential of living alone at the end of life, makes older women particularly vulnerable to financial and health challenges as they age, suggesting they could benefit more from financial literacy interventions. Nonetheless, the study also suggests that other approaches to close the baseline financial literacy gender gap are needed well before older age.