1

Insights: Financial Capability

INSIGHTS: FINANCIAL CAPABILITY—SEPTEMBER 2015

September 2015

Author:

Gary Mottola, Ph.D.

What’s Inside:

A Snapshot of Investor Households 

in America

Summary

Approximately 6 in 10 households in the United States own securities 

investments—typically through taxable accounts, IRAs or employer-sponsored 

retirement plans. However, this figure drops to a little over 3 in 10 if only taxable 

investments are considered. Households that own taxable accounts are more likely 

to be older, affluent, college educated and white relative to households with only 

retirement accounts or households without investment accounts. They also have 

much higher levels of financial literacy and moderately higher risk-tolerance levels. 

Certain demographic groups are significantly under-represented among investor 

households, including blacks and Hispanics—although these differences narrow 

after controlling for factors such as income, education and age.

What U.S. Investors Own

Data from the 2012 National Financial Capability study indicate that 33 percent 

of U.S. households own taxable investment accounts, like stocks, bonds or 

mutual funds (Figure 1).1 Importantly, most of these taxable investor households 

(89 percent) also own a retirement account like a 401(k) or IRA. Twenty-nine 

percent of U.S. households own only retirement accounts, like employer-sponsored 

retirement plans and various IRAs. The remaining 38 percent do not own any 

investment accounts.2 

Figure 1. Investment Status

38%

29%

33%

Source: 2012 National Financial Capability Study State-by-State Survey

Taxable Accounts

Only Retirement Accounts

No Accounts

Summary 1

What U.S. Investors Own 1

A Closer Look at Investment

Account Ownership 2

Different Investments, 

Different Demographics 2

The Knowledge, Attitudes 

and Behavior of Investors 4

Understanding the Role 

of Gender 6

Vulnerable Segments 

and Retail Investing 7

A Broader View of Retail 

Account Ownership 8

Conclusion 9

About the Data 9

Endnotes 10

References 10

Appendix A: Financial 

Literacy Quiz 11

Appendix B: Sample 

Demographics 12
2 INSIGHTS: FINANCIAL CAPABILITY—SEPTEMBER 2015

A Snapshot of Investor Households in America

A Closer Look at Investment Account 

Ownership

A deeper analysis of investors with taxable accounts 

reveals a more complex story of the U.S. investor. The 

vast majority of investors who have a taxable account 

also have additional investments in tax-deferred or 

tax-incentivized accounts such as employer-sponsored 

retirement plans and IRAs. Indeed, over half have a 

taxable account, an employer-sponsored retirement 

account and an IRA. Another 26 percent have a taxable 

account and an employer-sponsored retirement account, 

and 12 percent have a taxable account and an IRA. Only 

11 percent of households in this segment have just a 

taxable account (Figure 2). 

Figure 2. Households With Taxable Accounts

Source: 2012 National Financial Capability Study 

State-by-State Survey

A similar look at investors with only retirement accounts 

reveals that this segment is dominated by households 

that only have employer-sponsored retirement 

accounts—74 percent. An additional 17 percent have 

both an employer-sponsored account and an IRA, while 

fewer than one-tenth (9 percent) have only an IRA 

(Figure 3).

Source: 2012 National Financial Capability Study 

State-by-State Survey

Different Investments, Different 

Demographics

There are some significant demographic differences 

between groups that hold taxable accounts, retirement 

accounts and no investment accounts at all (Figure 4). 

For example, households that own taxable investments 

are much more likely to have higher incomes. Thirtyfour percent of households with taxable accounts have 

incomes of $100,000 or more, compared to 15 percent 

for households with only retirement accounts and 3 

percent for households with no investment accounts. 

Households that own taxable accounts are also older, 

more likely to be college educated and more likely to 

be white. Forty-two percent of the respondents from 

households with taxable investment accounts have a 

college degree compared to 27 percent for households 

with only retirement accounts, and 12 percent for 

households with no accounts. And 73 percent of 

respondents from households that own taxable 

investments are white, compared to 67 percent for 

households with only retirement accounts, and 

61 percent for households without accounts.3

Taxable & 

Employer & IRA 

51%

Taxable 

11%

Taxable

& IRA

12%

Taxable &

Employer

26%

Figure 3. Households With Only Retirement Accounts

Employer

74%

Employer 

& IRA

17%

IRA 

9%
3 INSIGHTS: FINANCIAL CAPABILITY—SEPTEMBER 2015

A Snapshot of Investor Households in America

Figure 4. Demographic Characteristics by Investment Status

Taxable Accounts Only Retirement Accounts No Accounts

Sample Size 8,830 7,451 8,896

Mean Age 51 47 40

Household Income Less Than $25K

$25 to $50K

$50 to $100K

$100 to $150K

$150K+

8%

17%

41%

20%

14%

13%

32%

40%

11%

4%

53%

29%

14%

2%

1%

Race/Ethnicity White

Black

Hispanic

Asian

Native American

73%

8%

11%

7%

1%

67%

12%

14%

5%

1%

61%

15%

18%

3%

2%

College Degree 42% 27% 12%

Source: 2012 National Financial Capability Study State-by-State Survey

Note: Due to missing data, 332 respondents could not be placed into one of the three segments.

These three groups also vary considerably by household composition. As seen in Figure 5, married households are more 

likely to own investments compared to single households. Forty-six percent of married households without dependents 

own taxable accounts, and 36 percent of married households with dependents own taxable accounts. Taxable 

account ownership drops for single households—with a low of 15 percent for single households headed by females 

with dependents. As represented by the line in Figure 5, married households have higher incomes relative to single 

households, which could explain some of the account ownership differences. 

Figure 5. Investment Status by Household Composition

Source: 2012 National Financial Capability Study State-by-State Survey

Married w/o

Dependents

Married w/

Dependents

Single Male w/o

Dependents

Single Male w/

Dependents

Single Female w/o

Dependents

Single Female w/

Dependents

15% 23% 26% 27%

36%

46%

26%

25%

25%

19%

35% 33%

55% 48% 52% 59%

21% 29%

100%

0%

 Taxable Accounts Only Retirement Accounts

 No Accounts Income>=$50K

100%

80%

60%

40%

20%

0%

% with household income>=$50K
4 INSIGHTS: FINANCIAL CAPABILITY—SEPTEMBER 2015

A Snapshot of Investor Households in America

The Knowledge, Attitudes and Behavior 

of Investors

Beyond demographics, financial literacy and self-assessed 

math knowledge vary substantially by investment 

status. Financial literacy was measured by administering 

a widely used, five-question financial literacy quiz 

covering fundamental concepts of economics and 

finance expressed in everyday life, such as calculations 

involving interest rates and inflation, principles relating 

to risk and diversification, the relationship between bond 

prices and interest rates, and the impact that a shorter 

term can have on total interest payments over the life 

of a mortgage (see Appendix A for actual questions).4

Respondents were classified as having high financial 

literacy if they answered four or five questions correctly 

on the five-question financial literacy quiz and as having 

low financial literacy otherwise. 

Figure 6 shows the percent of each group that could 

correctly answer each question, as well as the percent 

of each group coded as “high financial literacy.” 

Respondents from households that own taxable 

investments were more likely to answer the questions 

correctly relative to households with only retirement 

accounts or no accounts. Further, respondents from 

households with taxable accounts are much more likely 

to be considered highly financially literate compared to 

respondents from households only holding retirement 

accounts or no accounts—60 percent, 40 percent and 

21 percent, respectively.

Households that own taxable investments did 

not, however, perform particularly well on the two 

investment-related questions. For example, only 42 

percent of respondents from households that own 

taxable accounts answered the bond price question 

correctly, and only 68 percent answered the financial 

risk question correctly. While these percentages are 

higher than the percentages for households with only 

retirement accounts and no accounts, they are not 

particularly impressive on an absolute basis and suggest 

that significant gaps in financial knowledge exist even 

among older, more affluent U.S. adults who have higher 

levels of educational attainment. 

Figure 6. Financial Knowledge by Investment Status 

Taxable 

Accounts 

Only 

Retirement 

Accounts 

No 

Accounts

Interest Rate 

Question 84% 79% 66%

Inflation 

Question 74% 66% 48%

Bond Price 

Question 42% 26% 18%

Mortgage 

Question 87% 82% 62%

Risk Question 68% 49% 32%

High Financial 

Literacy 60% 40% 21%

Source: 2012 National Financial Capability Study

State-by-State Survey

A similar pattern emerges when you look at self-assessed 

financial knowledge. Respondents were asked to rate 

their own financial knowledge on a 7-point scale, where 

1 equals “very low” and 7 equals “very high”—and 

respondents who rated themselves as 5, 6 or 7 were 

coded as “high self-assessed financial knowledge” and 

those who coded themselves as 1, 2, 3 or 4 were coded 

as “low self-assessed financial knowledge.” Figure 7 

shows that respondents from households with taxable 

accounts were more likely to rate themselves high in 

terms of financial knowledge (57 percent) compared 

to respondents from households with only retirement 

accounts (36 percent) or no accounts (30 percent). 

A similar but less pronounced pattern exists for selfassessed math knowledge. Respondents were asked 

to rate their mathematical ability on a 7-point scale, 

where 1 equals “very low” and 7 equals “very high”—

and respondents who rated themselves as 5, 6 or 7 

were coded as “high self-assessed math knowledge” and 

those who coded themselves as 1, 2, 3 or 4 were coded 

as “low self-assessed math knowledge.” As seen in Figure 

7, respondents from households with taxable accounts 

were more likely to rate their math knowledge as high 

compared to respondents from households without 
5 INSIGHTS: FINANCIAL CAPABILITY—SEPTEMBER 2015

A Snapshot of Investor Households in America

taxable accounts. Math knowledge—sometimes referred 

to as numeracy—is an important aspect of financial 

literacy because many financial transactions require 

mathematical calculations, and numeracy has been 

shown to be related to financial decisions.5

Figure 7. Self-Assessed Financial Knowledge and 

Math Knowledge

differences do not look very pronounced, the relative 

differences are meaningful. For example, respondents 

from households with taxable investment accounts had 

a risk tolerance rating of 5.8 compared to a rating of 4.4 

for respondents from households with only retirement 

accounts. While this is only an absolute difference of 

1.4 points, it translates to a relative difference of 32 

percent.6 Households with taxable accounts may have a 

higher risk tolerance because they are more affluent and 

likely better able to absorb a financial loss relative to less 

affluent households.

Figure 8. Risk Tolerance by Investment Status

Source: 2012 National Financial Capability Study 

State-by-State Survey

By its very nature, investing typically involves taking on 

some degree of risk—ranging from the risk of returns 

failing to keep pace with inflation to the risk of incurring 

losses on your investment or even losing your entire 

investment. As such, people who are interested in 

participating in stock and bond markets must be willing 

to tolerate risk. To assess respondents’ willingness to 

take investment risk, they were asked the following 

question: 

When thinking of your financial investments, how 

willing are you to take risks? Please use a 10-point 

scale, where 1 means “Not At All Willing” and 10 

means “Very Willing.”

The mean risk tolerance rating for all respondents was 

4.8—a fairly low tolerance, but perhaps not surprising in 

the wake of the Great Recession. Risk tolerance ratings 

did vary by investment status, though. As seen in Figure 

8, respondents from households with taxable accounts 

had a higher risk tolerance rating than respondents 

from households with only retirement accounts or 

households without accounts. Although the absolute 

Source: 2012 National Financial Capability Study 

State-by-State Survey

The three different groups also differ behaviorally—

that is, they differ in the amount of financial education 

they have participated in and in their use of financial 

professionals (Figure 9). Respondents from households 

with taxable accounts are much more likely to have 

participated in financial education at some point in their 

life, and they are over twice as likely to use a financial 

professional for savings or investment advice: 55 percent 

of households with taxable accounts used a financial 

professional compared to 25 percent of respondents 

from households with only retirement accounts and 

11 percent of respondents from households with no 

investment accounts.7

80%

0%

Financial Knowledge

Taxable Accounts Only Retirement Accounts No Accounts

Math Knowledge

Taxable 

Accounts

10

1

5.8 4.4 4.2

Only Retirement 

Accounts

No 

Accounts
6 INSIGHTS: FINANCIAL CAPABILITY—SEPTEMBER 2015

A Snapshot of Investor Households in America

Source: 2012 National Financial Capability Study 

State-by-State Survey

Interpreting the relationship between gender and 

investment behavior is complicated by household 

composition. Investment decisions are often made 

at the household level, so it can be difficult to tease 

apart gender effects because husbands and wives 

may be making investment decisions jointly, or the 

survey respondent (regardless of gender) may not 

be solely responsible for the investment decisions.8

To get a purer understanding of gender and investment 

behavior, unmarried women are compared with 

unmarried men in the chart below. While this approach 

Figure 9. Financial Education and Advice by Investment Status

Understanding the Role of Gender

Source: 2012 National Financial Capability Study 

State-by-State Survey

has its own limitations—for instance, the age and 

income of unmarried men and women is generally 

lower than the age and income of married men and 

women—this approach does afford the opportunity 

to examine gender effects in a cleaner manner.

The percentage of unmarried women and unmarried 

men with taxable investment accounts is similar—

21 percent for women and 24 percent for men. 

Unmarried women with taxable investment accounts 

have significantly lower risk tolerance levels than 

men (4.0 vs. 5.3 on a 10-pt scale where 1 means “not 

at all willing” to take investment risk and 10 means 

“very willing” to take risk). And unmarried women 

with taxable investments are slightly more likely use 

a financial professional for savings and investment 

advice, 55 percent for women compared to 50 percent 

for men.

It is encouraging that unmarried women with taxable 

investment accounts have fairly high levels of financial 

literacy—higher than unmarried women and men 

without taxable investment accounts (see figure to 

the left). However, they still trail the financial literacy of 

unmarried men by a meaningful 12 percentage points.

Taxable Accounts

Only Retirement Accounts 

No Accounts

45%

57%

20%

33%

60%

0%

Owns 

Taxable Invenstment

Unmarried Women Unmarried Men

Does Not Own 

Taxable Invenstment

Participated in Finacial 

Education

Used a Financial 

Professional

60%

0%

19% 14%

26% 25%

11%

55%

% high financial literacy
7 INSIGHTS: FINANCIAL CAPABILITY—SEPTEMBER 2015

A Snapshot of Investor Households in America

Vulnerable Segments and Retail Investing

Looking across the entire population, it is evident that 

there are demographic differences by investment 

status. However, a closer look at certain demographic 

groups sheds valuable insight into how account 

ownership varies within these groups. For example, 

Figure 10 shows account ownership within different 

household income bands—and, not surprisingly, account 

ownership is concentrated in the higher income levels. 

Taxable account ownership is at a low of 9 percent for 

households with less than $25,000 in household income 

and at a high of 75 percent for households with incomes 

above $150,000. That is over an eight-fold difference 

in taxable account ownership between the lowest and 

highest income bands. 

Figure 10. Investment Status by Household Income

Taxable account ownership is also highly correlated with 

age. As seen in Figure 11, only 22 percent of millennial 

households (ages 18 to 34) own a taxable account, 

compared to 29 percent for gen X households (35 to 

49), 39 percent for boomer households (50 to 66) and 

53 percent for households from the silent generation 

(67 and older).9 The percent of households owning only 

retirement accounts is fairly even across the generations, 

although somewhat lower for millennials. 

Source: 2012 National Financial Capability Study 

State-by-State Survey

Source: 2012 National Financial Capability Study 

State-by-State Survey

Pronounced differences in investment account 

ownership also vary with race (Figure 12). Asians have 

the highest concentration of households with taxable 

accounts at 46 percent, compared to 36 percent for 

whites. Hispanics and blacks have significantly fewer 

households with taxable accounts, 25 percent and 22 

percent, respectively. So relative to whites, Hispanics 

are 11 percentage points less likely to own taxable 

investment accounts and blacks are 14 percentage 

points less likely to own taxable accounts. <$25K $25-50K $50-100K $100-150K $150K 10

100%

0%

77%

43%

18% 9% 7%

14%

35%

38%

30%

18%

9%

22%

44%

61% 75%

Taxable Accounts Only Retirement Accounts No Accounts

Household Income

100%

0%

Millennials Gen Xers Boomers Silent

Generation

Taxable Accounts Only Retirement Accounts No Accounts

55%

38%

30% 21%

23%

33%

31%

26%

22%

29%

39%

53%

Figure 11. Investment Status by Generation

Figure 12. Investment Status by Race

Asian White Hispanic

Taxable Accounts Only Retirement Accounts No Accounts

26%

35%

48% 48%

28%

29%

27% 30%

46%

36%

25% 22%

100%

0%

Black

Source: 2012 National Financial Capability Study 

State-by-State Survey
8 INSIGHTS: FINANCIAL CAPABILITY—SEPTEMBER 2015

A Snapshot of Investor Households in America

A Broader View of Retail Account Ownership

Up until this point, the relationship between investment account ownership and various measures has been 

investigated in a bivariate fashion. For example, age and investment account ownership, race and investment account 

ownership, and financial literacy and investment account ownership were all examined, but each pair of variables was 

examined in isolation. In reality, investment account ownership is likely driven by a mix of these and other factors. 

Regression analysis is a tool that can be used to assess the relationships among these variables simultaneously and 

isolate variables of interest. So, for example, the strength of the relationship between race and investment status can be 

examined while holding constant other important variables like income and education.

Figure 13 shows the results of a regression analysis that predicts the likelihood of owning a taxable investment account 

using a number of variables. It is immediately clear that household income has the strongest relationship with taxable 

account ownership. Households with incomes of $50,000 or more are 22 percentage points more likely than households 

with household incomes of less than $50,000 to own taxable accounts. Considering that, on average, 33 percent of 

households own retail accounts, a 22 percentage-point swing in taxable account ownership is quite large. 

Figure 13. Factors Related to Taxable Investment Account Ownership

Source: 2012 National Financial Capability Study State-by-State Survey

Notes: A linear probability regression with correction for heteroskedastic errors was used, collinearity was checked for and not 

found. The sample size for the regression was 24,456, and all variables are significant at alpha .01 except Asian. The adjusted 

r-square is 26 percent, and white is the reference group for the race variables. Logistic regression yielded very similar results. 

Regression output available upon request.

Beyond household income, education level and financial literacy are strongly related to taxable investment account 

ownership. Households in which the respondent has a college degree are 13 percentage points more likely than 

households in which the respondent does not have a college degree to own taxable investment accounts. And 

households where the respondent is classified as high financial literacy are 10 percentage points more likely than 

households where the respondent is classified as low financial literacy to own taxable investment accounts.11

-10% 0% 10% 20% 30%

Change in Probability of Owning a Taxable Investment

Black

Hispanic

Dependents

Married

Asian

Risk Tolerance

Age (10-Yr)

High Financial Literacy

College Degree

Income > $50K
9 INSIGHTS: FINANCIAL CAPABILITY—SEPTEMBER 2015

A Snapshot of Investor Households in America

Other demographic variables like age and race are also 

associated with taxable account ownership. For example, 

black households are 7 percentage points less likely than 

white households to own taxable investments, all things 

equal. Hispanic households are 4 percentage points 

less likely to own taxable investments relative to white 

households, all things equal. 

Importantly, the 14 percentage point difference between 

white and black households in terms of taxable account 

ownership noted above drops in half to 7 percentage 

points after controlling for key demographic variables 

such as income and education. And the 11 percentagepoint difference between white and Hispanic households 

drops to 4 percentage points. So, even though racebased differences in taxable account ownership persist, 

they are significantly smaller after one adjusts for other 

demographic variables like income and education. For 

example, if a white respondent and black respondent 

with roughly the same age, income and education level 

were compared, the white respondent’s household 

would be about 7 percentage points more likely to own a 

taxable investment account—not 14 percentage points.

Other noteworthy findings from this regression include 

the following: for every 1-point increase on the risk 

tolerance scale, the likelihood of retail account ownership 

increases by 4 percentage points; and for every 10-year 

increase in age, retail account ownership increases by 5 

percentage points. 

Conclusion

Approximately 33 percent of U.S. households own 

taxable investment accounts, 29 percent own only 

retirement accounts, and 38 percent do not own any 

investment accounts. Households that own taxable 

investment accounts are more affluent and financially 

knowledgeable than households with only retirement 

accounts, which are in turn more affluent and financially 

knowledgeable than the households without investment 

accounts. 

There are some demographic segments that are underrepresented in the retail investor world—most notably 

black and Hispanic households. And while it can be 

argued that these households are under-represented 

because they tend to have lower household incomes, the 

differences persist, albeit at a smaller rate, even when 

adjustments are made for key demographic factors, 

like household income and education level.

Household income has the strongest relationship with 

taxable investment account ownership. While household 

incomes can increase, stagnating incomes could serve as 

a barrier to taxable investment account ownership. 

The relationship between financial literacy and taxable 

investment account ownership is promising because 

it suggests that one means of increasing investment 

account ownership for under-represented demographic 

groups could be through financial education initiatives 

targeted to these groups. 

About the Data

This study uses data from the State-by-State version 

of the 2012 National Financial Capability Study. 

The National Financial Capability Study was funded 

by the FINRA Investor Education Foundation and 

conducted by Applied Research and Consulting. The 

study used a sample of 25,509 adults ages 18 and 

older (approximately 500 per state plus the District of 

Columbia) obtained from Research Now, SSI (Survey 

Sampling International) and EMI Online Research 

Solutions via proprietary online panels of individuals 

who have agreed to participate in the panel and who 

are compensated for completing surveys. Nonprobability 

quota sampling was used to obtain the sample. The 

data is representative of the U.S. adult population (ages 

18 and up) on age by gender, ethnicity, education and 

census division when weighted. Data from the U.S. 

Census Bureau’s American Community Survey were used 

to construct the weights. All statistics in this report are 

weighted, but the sample sizes are unweighted. Figures 

may not always sum to 100 percent due to rounding. The 

survey was fielded from July 2012 through October 2012. 

A pure probability sample of this size would have an 

estimated margin of error of half a percentage point 

(i.e., plus or minus 0.5 percent), and the margin of error 

would increase somewhat for sub-groupings of the 

sample. As in all survey research, there are possible 

sources of error, such as coverage, nonresponse and 

measurement error that could affect the results. More 

information about the National Financial Capability 

Study—including the questionnaire and detailed 

methodology documents—can be found at www.

USFinancialCapability.org. Appendix B contains sample 

demographics.
10 INSIGHTS: FINANCIAL CAPABILITY—SEPTEMBER 2015

A Snapshot of Investor Households in America

Endnotes

1. Respondents are coded as owning taxable accounts if 

they answer yes to the following question: “Not including 

retirement accounts, does your household have any 

investments in stocks, bonds, mutual funds or other 

securities.”

2. Although different measurement methodologies can yield 

different estimates of households without investable assets, 

a custom analysis conducted by Greenwald & Associates 

using EBRI’s 2015 Retirement Confidence survey found that 

37 percent of workers and 42 percent of retirees have no 

defined-contribution, IRA or defined-benefit assets. Since it 

is uncommon for households without retirement accounts 

to have taxable accounts, these are reasonable estimates 

of households without any investable assets, and they are 

very close to the 38 percent statistic cited in Figure 1.

3. For married respondents (who make up 54 percent of the 

sample), we do not have data on the age, race or education 

level of their spouses. In these instances, data from the 

respondent was used to characterize the household in terms 

of age, race and education level. However, using a married 

respondent’s data to proxy for the household typically leads 

to an accurate characterization of the household, in part 

because marriages in the U.S. have historically tended to be 

among demographically similar individuals. For example, 

fewer than one-tenth of marriages (8.4 percent) are 

interracial or interethnic (Taylor, Wang, Parker Passell, 

Patten and Motel, 2012), more than half of married couples 

have the same education level (Taylor, Fry Cohn Wang, 

Velasco and Dockterman, 2010), and 60 percent of married 

couples are separated by three years of age or fewer 

(Current Population Survey, 2013). 

4. The financial literacy quiz can also be found at www.

USFinancialCapbility.org.

5. Lusardi (2012).

6. (5.8-4.4)/4.4=.32

7. Most households without investment accounts have bank 

accounts, so they may be using the advice of financial 

professionals to assist with their savings decisions.

8. See Theodos, Kalish McKernan and Ratcliffe (2014) for 

an in-depth examination of financial knowledge, 

behavior and well-being by gender.

9. Respondent ages are as of 2012.

10. Ariel/Hewitt (2008) found that even after controlling for 

important demographic variables, blacks and Hispanics 

had lower 401(k) participation and contribution rates than 

whites, and Pagliaro and Utkus (2014) found blacks and 

Hispanics had lower account balances for a given level of 

income. However, Munnell and Sullivan (2009) found that 

with additional control variables not used in the Ariel/

Hewitt (2008) study, 401(k) participation and contribution 

decisions did not vary by race.

11. Using data from the Dutch Central Bank Household Survey, 

Rooij, Lusardi and Alessie (2011) found that financial literacy 

increased the likelihood of stock market participation.

References

Ariel/Hewitt. (2008). 401(k) Plans in Living Color: A Study of 

401(k) Savings Disparities across Racial and Ethnic Groups. 

Lincolnshire, IL.

EBRI. (2015). 2015 Retirement Confidence Survey.

Lusardi, A. (2012). Numeracy, financial literacy and financial 

decision-making. Numeracy, 5(1).

Munnell, Alicia H. and Christopher Sullivan. (2009). 401(k) 

Plans and Race. Boston Center for Retirement Research.

Pagliaro, Cynthia A. and Stephen P. Utkus. (2014). Diversity 

and Defined Contribution Plans: Differences in 401(k) 

Retirement Wealth. Vanguard Center for Retirement 

Research.

Rooij, Maarten van, Annamaria Lusardi and Rob J. Alessie. 

(2011). Financial Literacy, Retirement Planning, and 

Household Wealth. NBER Working Paper Series, WP 17339.

Taylor, Paul, Richard Fry, D’Vera Cohn, Wendy Wang, Gabriel 

Velasco and Daniel Dockterman. (2010). Women, Men and 

the New Economics of Marriage. Pew Research Center, 

Social & Demographic Trends.

Taylor, Paul, Wendy Wang, Kim Parker, Jeffrey S. Passel, 

Eileen Patten and Seth Motel. (2012). The Rise of 

Intermarriage: Rates, Characteristics Vary by Race and 

Gender. Pew Research Center, Social & Demographic Trends.

Theodos, Brett, Emma Kalish, Signe-Mary McKernan and 

Caroline Ratcliffe. (2014). Do Financial Knowledge, Behavior, 

and Well-Being Differ by Gender? Urban Institute.
11 INSIGHTS: FINANCIAL CAPABILITY—SEPTEMBER 2015

A Snapshot of Investor Households in America

Appendix A: Financial Literacy Quiz

Correct answers are in bold

Suppose you had $100 in a savings account and the 

interest rate was 2% per year. After 5 years, how much 

do you think you would have in the account if you left 

the money to grow?

: More than $102

: Exactly $102

: Less than $102

: Don’t know

: Prefer not to say

Imagine that the interest rate on your savings account 

was 1% per year and inflation was 2% per year. After 

1 year, how much would you be able to buy with the 

money in this account?

: More than today

: Exactly the same

: Less than today

: Don’t know

: Prefer not to say

If interest rates rise, what will typically happen to 

bond prices?

: They will rise

: They will fall

: They will stay the same

: There is no relationship between bond prices 

and the interest rate

: Don’t know

: Prefer not to say

A 15-year mortgage typically requires higher monthly 

payments than a 30-year mortgage, but the total 

interest paid over the life of the loan will be less.

: True

: False

: Don’t know

: Prefer not to say

Buying a single company’s stock usually provides a 

safer return than a stock mutual fund.

: True

: False

: Don’t know

: Prefer not to say

✓

✓

✓

✓

✓
12 INSIGHTS: FINANCIAL CAPABILITY—SEPTEMBER 2015

A Snapshot of Investor Households in America

1735 K Street, NW

Washington, DC 20006-1506

www.finrafoundation.org

15_0308.1—08/15

Appendix B: Sample Demographics

Age Unweighted Frequency Weighted Percent

Millennials (18-34) 6,865 31%

Gen Xers (35-49) 6,642 25%

Boomers (50-66) 8,951 33%

Silent Generation (67+) 3,051 11%

Gender

Male 11,382 49%

Female 14,127 51%

Household Income

< $25K 6,365 27%

$25K-$50K 6,634 26%

$50K-$100K 7,956 30%

$100K-$150K 2,865 11%

$150K+ 1,689 6%

Ethnicity

White 18,715 66%

Black 2,700 12%

Hispanic 2,253 15%

Asian 946 5%

Other 895 2%

Household Composition

Married Without Dependents 7,471 27%

Married With Dependents 6,849 27%

Single Male Without Dependents 3,911 18%

Single Male With Dependents 927 4%

Single Female Without Dependents 4,262 16%

Single Female With Dependents 2,089 8%