Many Women Were Ill-Prepared For the Pandemic's Financial Challenges, TIAA Institute-GFLEC Study Reveals

Even before the onset of COVID-19, many women, particularly underrepresented minority women, exhibited low financial literacy levels -- underscoring the need for policies and programs that empower them

November 18, 2020 9:00 AM EST

NEW YORK, Nov. 18, 2020 /PRNewswire/ -- A new report by the TIAA Institute and the Global Financial Literacy Excellence Center (GFLEC) at the George Washington University School of Business reveals worrying deficiencies in financial literacy among U.S. women immediately before the onset of COVID-19. These knowledge gaps may hinder women's ability to make appropriate financial decisions in times of uncertainty. 

Using data from the fourth annual TIAA Institute-GFLEC Personal Finance Index (P-Fin Index), conducted in January 2020, the research found that, on average, adult women correctly answered 49 percent of the P-Fin questions versus men who correctly answered 56%.

Further, financial literacy is notably lower among underrepresented minority women in seven of the eight functional knowledge areas assessed in the index – with 38 percent of African American and Hispanic women correctly answering index questions compared to 54 percent of their white peers. Comprehending risk and uncertainty is the area of lowest financial literacy among all women, regardless of race.

"The combination of precarious personal finances and low financial literacy results in poor financial resiliency," said TIAA Institute Senior Economist Paul Yakoboski. "This only amplifies the challenge of weathering what would have been very difficult financial circumstances in any case. As the United States moves past the pandemic and its economic consequences, taking steps to improve American women's financial literacy will be essential to boost their financial resilience."

Additional findings reveal that minority women spent, on average, 13 hours per week contemplating and addressing personal finance issues, whereas their white peers spent five hours a week. The data show that financial literacy is associated with spending less time dealing with personal finance issues, highlighting the importance of sound financial knowledge.

"The 2020 P-Fin Index findings on women, particularly underrepresented women, are alarming. They signal an urgent need for policymakers, private-sector leaders, and others to develop policies and programs that empower women," said Annamaria Lusardi, Founder and Academic Director of GFLEC and University Professor at GW. "Without financial education interventions, the inequities we found in this study will become even more severe."

The P-Fin Index is unique in its capacity to produce a robust measure of overall personal finance knowledge and an analysis of knowledge across eight areas of personal finance. It identifies how financial literacy in areas in which individuals routinely function contributes to financial wellness. The index comprises 28 questions concerning the following functional areas:

  • Earning: determinants of wages and take-home pay
  • Consuming: budgets and managing spending
  • Saving: factors that maximize accumulations
  • Investing: investment types, risk and return
  • Borrowing/managing debt: the relationship between loan features and repayments
  • Insuring: types of coverage and how insurance works
  • Comprehending risk: understanding uncertain financial outcomes
  • Go-to information sources: recognizing appropriate sources and advice

"The TIAA Institute and GFLEC's 2020 personal finance research shows that the nation needs a serious financial education campaign, and that our society must address the structural inequities that contribute to this gender gap in financial literacy," said Cindy Hounsell, president of the Women's Institute for a Secure Retirement (WISER).

The full report can be found [HERE]

About the TIAA InstituteThe TIAA Institute helps advance the ways individuals and institutions plan for financial security and organizational effectiveness. The institute conducts in-depth research, provides access to a network of thought leaders, and enables those it serves to anticipate trends, plan future strategies and maximize opportunities for success. For more information about the TIAA Institute, visit and follow us on Twitter @TIAAInstitute.

About TIAAWith an award-winning[1] track record for consistent investment performance, TIAA ( is the leading provider of financial services in the academic, research, medical, cultural and government fields. TIAA has $1.2 trillion in assets under management (as of 9/30/2020[2]) and offers a wide range of financial solutions, including investing, banking, advice and education, and retirement services.

About GFLEC         The Global Financial Literacy Excellence Center (GFLEC) is dedicated to advancing research and solutions that open the door to universal financial literacy. In working toward that mission, GFLEC has positioned itself as the world's leading incubator for financial literacy research, policy, and solutions. GFLEC launched in 2011 at the George Washington University School of Business in Washington, D.C. Since then, it has pioneered breakthrough tools to measure financial literacy, developed and advised on educational programs, and crafted policy guidelines aimed at advancing financial knowledge in the United States and around the world. For more information on GFLEC, visit

[1]The Refinitiv Lipper Fund Awards are based on the Lipper Leader for Consistent Return rating, which is a risk-adjusted performance measure calculated over 36, 60 and 120 months. Lipper Leaders fund ratings do not constitute and are not intended to constitute investment advice or an offer to sell or the solicitation of an offer to buy any security of any entity in any jurisdiction. For more information, see  Lipper Fund Awards from Refinitiv, ©2020 Refinitiv. All rights reserved. Used under license.  The Award is based on a review of risk-adjusted performance of 39 companies for 2016, 36 for 2017, 35 for 2018 & 2019, and 30 for 2020. The award pertains only to the TIAA-CREF mutual funds in the mixed-asset category.  Without such waivers ratings could be lower. Past performance does not guarantee future results. For current performance, rankings and prospectuses, please visit

[2]Based on approximately $1.2 trillion of assets under management across Nuveen affiliates and TIAA investment management teams as of 9/30/20.

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