RT Journal Article SR Electronic T1 Financial Literacy and Wellness among African–Americans: New Insights from the Personal Finance (P-Fin) Index JF The Journal of Retirement FD Institutional Investor Journals SP jor.2020.1.070 DO 10.3905/jor.2020.1.070 A1 Paul J. Yakoboski A1 Annamaria Lusardi A1 Andrea Hasler YR 2020 UL https://pm-research.com/content/early/2020/06/30/jor.2020.1.070.abstract AB The United States’ 44 million African–Americans account for 13% of the US population and have a significant impact on the economy, with $1.2 trillion in purchases annually. Yet the financial well-being of African–Americans lags that of the US population as a whole, and whites in particular. The reasons for these gaps are complex, but one area of importance in addressing them is increased financial literacy, the knowledge and understanding that enable sound financial decision-making and effective management of personal finances. This report uses the 2019 TIAA Institute-GFLEC Personal Finance Index (P-Fin Index) to examine the current state of financial literacy and financial wellness among African–American adults. The study finds that personal finance knowledge among African–American adults lags that of whites. Further, it varies across demographic groups within the African–American population, with greater financial literacy among men, older individuals, those with more formal education, and those with higher incomes. Insuring, comprehending risk, investing, and identifying go-to information sources are the areas where personal finance knowledge is lowest; borrowing and debt management is the area of highest personal finance knowledge. There is a strong link between financial literacy and financial wellness among African–Americans. Those who are more financially literate are more likely to plan and save for retirement, to have non-retirement savings, and to better manage their debt; they are also less likely to be financially fragile. A more refined understanding of financial literacy among African–Americans can inform initiatives to improve financial well-being. While not a cure-all, increased financial literacy can lead to improved financial capability and practices that benefit even those with relatively low incomes.TOPICS: Wealth management, retirementKey Findings• Personal finance knowledge among African–Americans is low and lags that of whites. African–American financial literacy tends to be lowest in the areas of insuring, comprehending risk, investing, and go-to information sources.• Financial literacy varies across demographic groups within the African–American population; it is higher among men, older individuals, those with more formal education and higher incomes.• There is a strong link between financial literacy and financial wellness among African–Americans. Those who are more financially literate are more likely to plan and save for retirement, to have non-retirement savings, and to better manage their debt; they are also less likely to be financially fragile.