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Benefits November 13, 2025
Gap Between Men and Women’s Financial Literacy Becomes More Problematic as Adults Age
Women typically outlive men, but their financial literacy remains lower into their golden years, according to research from the Pension Research Council.
Reported by Emily Boyle
Art by Melinda Beck
As adults age, their health and financial literacy remain critical to their ability to make informed choices about medical care, insurance, day-to-day health management and retirement income. Yet their abilities to do so decline considerably.
The Pension Research Council at the Wharton School of the University of Pennsylvania recently published research that tracked more than 1,000 older adults—with an average age of 81 at the start of the study—and asked them 23 questions about financial and health knowledge for up to 12 years.
Perhaps unsurprisingly, 87% of participants experienced a decline in their financial health and literacy scores as they aged. Participants’ average combined baseline score of 70% declined by about one percentage point per year. Those who scored the lowest at baseline were also most likely to experience declines, as were older and less-educated respondents.
“Their declines are linked to poorer financial decisions, increased scam susceptibility and lower financial well-being,” wrote co-author Gary Mottola, research director of the FINRA Investor Education Foundation, in an emailed response to questions. “We also know that women have lower financial literacy levels than men, which makes declines more problematic because women typically live longer and need to fund longer retirements.”
On average, men scored about 3.6 percentage points higher than women on the financial and health literacy tests, even after controlling for age, income, education and medical conditions. The rate and likelihood of decline did not differ significantly by gender, as literacies deteriorated for both men and women in parallel.
“Understanding how financial literacy changes as we age and the role gender plays is important for improving educational interventions and protective measures,” Mottola wrote. “Plan sponsors and administrators have an opportunity to design communications for older plan participants related to investment choices and retirement income decisions that can incorporate insights from this study.”
Mottola suggested communication to participants could recognize that women face compounding risks, including lower incomes, longer lifespans and lower literacy levels, all of which can put them at greater risk of financial fragility later in life. Older individuals confront important decisions later in life, including when to claim Social Security benefits, whether to take a lump sum or annuity payment from a pension plan, and how not to outlive their retirement savings.
“These are complex decisions, and making mistakes, potentially because of declining financial literacy, could negatively impact older adults’ financial well-being later in life,” Mottola cautioned in his email response.
When asked what is driving the gender gap, Mottola responded that the gap is not completely about what men and women actually know—it also reflects how they answer the questions asked of them.
Studies consistently find that women are more likely than men to answer “I don’t know” on a financial literacy test, rather than guess, Mottola stated. However, most researchers score a response of “I don’t know” the same way that they score an incorrect answer. Women may answer that they “don’t know” more than men because they are underconfident. Conversely, because men are overconfident, their scores may occasionally benefit from guessing correctly, Mottola explained.
In a separate study from FINRA, women who were not given the choice to answer “don’t know” scored higher than those provided with a “don’t know” response option. Men scored higher than women on financial and investing knowledge assessments both with and without a “don’t know” option, but nonetheless, women had unrealized knowledge in both categories.
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