Retirement Readiness Linked to Parental Backgrounds
Parental education and household income have striking effects on financial literacy levels, reports new findings from the SPARK Institute and Corporate Insight.
The 2025 Annual Study on Financial and Retirement Literacy Among Students and Recent Hires surveyed 3,000 high school students, college students, and recently hired workers on their money and savings habits. It found that 63% of recent hires are already concerned over exhausting savings in retirement.
The study highlights a link between financial anxiety and accessibility—noting that those who displayed lower levels of anxiety came from college-educated, higher income backgrounds. Students who came from more privileged circumstances were likelier to engage in “positive financial behaviors,” like having a savings account, and less likely to have “negative financial behaviors,” like overdrafting their bank account, the study reports.
“One of the clearest insights from this year’s research is the outsized impact of the household a child grows up in,” said Mike Ellison, president of Corporate Insight and Co-Chair of SPARK’s Financial Literacy Committee. “Students from wealthier or college-educated families benefit from steady, at-home financial guidance, while kids from lower-income households often don’t receive the same foundation. As a result, they enter adulthood already behind. This gap isn’t about ability, it’s about access.”
Students were also likelier to receive financial guidance from their parents, while recent hires preferred scouring the internet for financial tips. Employers, teachers, professional financial advisors, and artificial intelligence (AI) tools were among the lowest-scored resources for students and recent hires.
Respondents were only more likely to reach out to their parents for financial guidance if their parents attended college, SPARK Institute and Corporate Insight found.
The study spotlights the impact of formal financial education but notes that a lack of access prevents consumers from achieving improved financial security and overall retirement readiness. It adds that only 59% of high school and 38% of college students have taken finance classes, before recommending institutions expand access by launching school mandates and partnerships with financial courses, and education, fintech, and retirement plan providers.
For first-generation and non-college populations, employers should provide access to practical tools. For women and underrepresented groups, inclusive education and workplace programs can feel empowering and comfortable.
It also underlines the potential impact of a nationwide campaign centered on early savings and retirement, similar to the “Got Milk?” campaign promoting milk products in the early 2000s. This includes integrating retirement savings and financial security at an earlier age, partnering with social media to deliver credible content, and conducting outreach to non-college populations, the study emphasizes.
“Recordkeepers and plan sponsors are uniquely positioned to help level the playing field, especially for first-generation professionals and young workers who didn’t grow up with the benefit of financial education at home,” said Tim Rouse, executive director of the SPARK Institute. “AI-powered personalized guidance, targeted outreach, and simple ‘Start Now’ messaging can make a real difference in closing these gaps, helping young participants build confidence and begin saving earlier, regardless of their background.”
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.