Financial Literacy and Retirement Planning in Canada

David Boisclair, Annamaria Lusardi, Pierre-Carl Michaud

NBER Working Paper No. 20297
Issued in July 2014
NBER Program(s):Aging

Financial literacy and Canadians' capacity to plan for retirement is of primary importance for the policy debate over pension system reform in Canada. In this paper, we draw on internationally comparable survey evidence on financial literacy and retirement planning in Canada to investigate how financially literate Canadians are and who does plan for retirement. We find that 42 percent of respondents are able to correctly answer three simple questions measuring knowledge of interest compounding, inflation, and risk diversification. This is consistent with evidence from other countries, and Canadians perform relatively well in comparison to Americans but worse than individuals in other countries, such as Germany. Among Canadian respondents, the young and the old, women, minorities, and those with lower educational attainment do worse, a pattern that has been consistently found in other countries as well. Retirement planning is strongly associated with financial literacy; those who responded correctly to all three financial literacy questions are 10 percentage points more likely to have retirement savings.

download in pdf format
   (374 K)

email paper

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w20297

Published: Boisclair, David & Lusardi, Annamaria & Michaud, Pierre-Carl, 2017. "Financial literacy and retirement planning in Canada," Journal of Pension Economics and Finance, Cambridge University Press, vol. 16(03), pages 277-296, July. citation courtesy of

Users who downloaded this paper also downloaded* these:
Lusardi and Mitchell w17108 Financial Literacy and Retirement Planning in the United States
Bucher-Koenen, Lusardi, Alessie, and van Rooij w20793 How financially literate are women? An overview and new insights
Bucher-Koenen and Lusardi w17110 Financial Literacy and Retirement Planning in Germany
Lusardi and Mitchell w17107 Financial Literacy around the World: An Overview
Lusardi and Mitchell w18952 The Economic Importance of Financial Literacy: Theory and Evidence
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us