Top 10 Best (and Worst) States for 401(k) Financial Literacy

Which states go it, which states don't?
Which states go it, which states don’t?

A new report (or rather report card) graded each state on the thorny issue of 401(k) financial literacy.

As expected, the results aren’t good. Produced by Champlain College’s Center for Financial Literacy, the report card grades each state on five category areas using 59 data points from 18 nationally recognized organizations.

According to the Center, no state received a final grade of A+ or A. Only 22 states, or 44 percent, received grades of A-, B+, B or B-.

Unfortunately, the states that tended to do the best in 401k financial literacy were generally smaller in size, representing just 23 percent of the adult population in this country.

More than three-quarters of adult Americans (77 percent) reside in states that have a grade of C or lower in 401k financial literacy and more than a quarter (28 percent) live in the 12 states with grades of D or F.

Top 10 States

Minnesota

North Dakota

Utah

Hawaii

Wyoming

New Hampshire

Iowa

South Dakota

Vermont

Alaska

Massachusetts

Wisconsin

Bottom 10 States

New Mexico

West Virginia

Texas

Georgia

Florida

Alabama

Oklahoma

Arkansas

Louisiana

Mississippi

The report card cites the National Foundation for Credit Counseling’s (NFCC) 2016 Consumer Financial Literacy Survey, which finds “45 percent of adults gave themselves grades C, D or F with regard to their personal finance knowledge, 26 percent have not saved anything for retirement, 31 percent have no savings other than retirement savings, 60 percent do not have a budget and 22 percent do not pay their bills on time.”

“Financial literacy is linked to positive outcomes like wealth accumulation, stock market participation and smart retirement planning,” the Center notes. “Illiteracy leads to falling into expensive traps like payday lending, auto title loans and high interest rates on credit due to low credit scores. Adults who have higher levels of financial literacy make better personal finance decisions and are more likely to have a checking account, rainy-day emergency fund or retirement plan, or to own stocks.”

John Sullivan
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With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.

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