saving and investing than their predecessors. young people are living with their parents longer, which helps conserve their limited resources but likely places a strain on their parents ’ budgets. also troubling is research showing that many consumers who should be saving for retirement instead have been forced to take hardship withdrawals from their 401 ( k ) plans. according to an analysis by vanguard, hardship withdrawals increased by 49 percent between 2005 and 2010. other types of withdrawals increased by 56 percent. the increasing use of retirement savings for other purposes is particularly troubling given that the responsibility for saving for retirement has shifted away from employers to individual employees. having a secure retirement is a high priority and a significant long - term goal for many americans, so it is especially important that they have an understanding of what level of resources they will need in retirement and the investment options available to them. bis central bankers ’ speeches individuals who are approaching retirement age, in particular, are being forced to make changes to their plans for retirement. social security administration data indicate that in 2009 and 2010, the proportions of men and women claiming social security benefits at age 62 began to rise again after several years of decline. workers have either chosen to leave the work force early in the last few years or, more likely, have applied for social security benefits as early as possible because of the weak job market. 1 opting to receive a smaller social security annuity earlier in life is just one of many hard decisions americans have had to make in order to balance their short - term and long - term financial needs. the recession has clearly disrupted the future expectations and financial plans of millions of americans, but even in the best of circumstances, effectively managing one ’ s longevity risk requires a level of financial knowledge well beyond that required of any previous generation. the pending retirement of baby boomers means that millions of older households will need to assess pension distributions and make decisions about payout options for their defined benefit plans. those with defined contribution plans will need to make decisions about the purchase of annuities or rates of withdrawal from these plans. younger workers, a majority of whom will not have pensions, will need to make complicated decisions about their target amounts of retirement savings, portfolio allocation, and asset management using 401 ( k ) plans, individual retirement accounts, and other, non - tax advantaged, accounts. financial products have also become more complex, adding a significant degree of difficulty to the important task of managing one ’ s own retirement savings. consumers need information and

improving financial well - being. the financial literacy and education commission, of which the federal reserve is a member, has only recently developed a core set of financial competencies, and has yet to establish the knowledge, skills, and behaviors that will meet these competencies. mobile payments and financial services have grown nearly five - fold from 2007 to 2010, and that growth is projected to continue at about 20 percent per year over the next four years. javelin strategy and research ( 2010 ), “ 2010 mobile banking and smartphone forecast. ” learning point associates ( 2009 ), “ the stock market game study : brief report. ” ( 164 kb pdf ). financial entertainment games include celebrity calamity, bite club, groove nation, and farm blitz. information on preliminary evaluations is available at http : / / www. d2dfund. org / financial _ entertainment _ preliminary _ results. joshua sledge, jennifer tescher, and sarah gordon ( 2010 ), “ from financial education to financial capability : opportunities for innovation ” ( 637 kb pdf ). center for financial services innovation. catherine bell and jeanne m. hogarth ( 2010 ), “ better deals on wheels : the effects of financial education on car buying, ” federal reserve bank of minneapolis, community dividend, april. the center for financial services innovation also promotes relevance as one of the key features of innovative financial education programs. bis central bankers ’ speeches in order to develop an effective financial course of study, we need to find the answers to some important research questions. i believe the answers to these questions will be quite important : what do people need to know in order to improve their long - term economic wellbeing? how does this content vary across demographic groups, such as by income, employment status, age, or culture? how do people obtain and process financial information? what sources do they use? do outcomes vary by the source or timing of the information? is instilling financial knowledge enough to improve consumer outcomes, or do we need to fundamentally change consumer behavior as well? how can we as policymakers influence financial behaviors? how should financial literacy be measured to evaluate the impact of financial education on financial outcomes and predict future behavior and well - being? should these measures vary across demographic groups and the context in which consumers make financial decisions? undoubtedly some of the research shared at this conference will shed light on these questions and also raise others. i look forward to learning from your work and to implementing and supporting programs that have demonstrated