Since promoting financial literacy is a lifelong personal mission, I’m always looking for ways to encourage self-assessments to determine if more education is needed.

A favorite resource of mine is Annamaria Lusardi of the George Washington University School of Business. Together with Olivia Mitchell of the Wharton School of the University of Pennsylvania, Lusardi published an October 2011 paper, “Financial literacy around the world: an overview.”

That paper identified three “big” questions to judge financial literacy. At the end of this column, I’ll provide you with a link to take the test and get your score.

It’s rather unusual to key into just three questions, but the three have become the standard worldwide — that is, researchers ensure consistency of what is being measured as “literacy,” according to a Fidelity spokesperson.

The first question tests whether individuals “grasp the general idea of calculations relating to interest rates.” The second question measures whether the individual understands the concept of inflation. The third measures risk diversification.

Fidelity, the mutual fund company, recently used the big three financial literacy questions in its own study. The data was collected through a national online survey of 3,234 working households earning at least $20,000 annually with respondents age 25 to 74, from Aug. 14 through Sept. 11, 2019. All respondents expect to retire at some point and have already started saving for retirement.

Here are the results:

48% of participants had all answers right.

52% of participants had at least one answer wrong.

11% of participants had all answers wrong.

Fidelity then used these results to calculate a “Retirement Score,” which is Fidelity’s retirement planning platform. The result is a numeric score (the higher the better) that indicates whether someone is on target to meet retirement income needs.

Those who answered all three questions correctly tended to have higher Retirement Scores, with the median being 89 out of 100. The median Retirement Score was lower for those answering all three incorrectly: 70. That’s very close to the “red zone” (65), which is Fidelity’s way of telling you that you need to take corrective action.

“When it comes to these findings, the most important takeaway is that for the average saver — regardless of age or income level — there’s a positive impact to knowing where you stand and then taking appropriate action to get on a path to even greater retirement readiness,” according to Melissa Ridolfi, vice president of retirement and college leadership at Fidelity Investments. “For each generation, the actions they need to focus on to improve retirement preparedness will differ. This is where financial education can have a tremendous impact, as there are different ‘must know’ financial concepts each generation should focus on to improve their retirement preparedness.”

Fidelity points out that baby boomers need to know where they stand with regard to retirement readiness; how Social Security decisions will impact them; their income sources; and how much to withdraw from their investments.

For Generation X, who are entering peak income years, they need to learn how to maximize earnings and turn extra income into savings.

Since millennials have the benefit of time on their side, they need to learn how to save and invest, improving their saving levels to achieve their life goals.

You can find Lusardi and Mitchell’s 2011 paper here:

To test yourself with the big three, go to

We’ll talk more about the relationship between financial literacy and retirement preparedness over the next few weeks.

Julie Jason, a personal money manager and author, can be reached at To hear Julie speak, visit