Findings Reveal Sharp Disparities Driven by Parental Education and Income; Personalized AI Guidance Emerging as a Critical Solution.
The SPARK Institute, in partnership with Corporate Insight, today released its 2025 Annual Study on Financial and Retirement Literacy Among Students and Recent Hires, offering one of the most comprehensive looks at how young Americans understand money, savings, and retirement readiness. The research, conducted by Corporate Insight’s Financial Literacy Team, surveyed nearly 3,000 high school students, college students, and recently hired workers.
Now in its third year, the study reveals both encouraging signs and persistent challenges, including widening literacy gaps along socioeconomic lines.
Key Findings
The report shows that financial literacy improves with age, yet significant knowledge gaps remain. While 62% of recent hires scored in the higher literacy category, nearly one in four still could not correctly identify a 401(k) as an employer-sponsored retirement plan. Retirement anxiety is also rising, with 63% of recent hires expressing concern about running out of money in retirement.
Critically, the study highlights the powerful role of parental education and household income. Young people whose parents attended college demonstrated higher financial literacy, healthier savings behaviors, and greater confidence. In contrast, respondents from lower-income or non-college-educated households consistently reported higher financial stress, lower savings rates, and less access to formal financial education.
“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.”
The study also notes gender disparities in saving behaviors, limited access to high-quality financial education courses, and an overwhelming desire among young people to learn more about saving and investing. Students who took dedicated financial education courses felt meaningfully better prepared than those in general coursework. Yet only 59% of high schoolers and 38% of college students had access to such classes. Nearly half of recent hires said they wish they knew more about savings, while college and high school students expressed strong interest in investing knowledge.
Implications for Recordkeepers and Plan Sponsors
The findings point to growing responsibilities, and opportunities, for retirement plan providers.
“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.”
The study urges recordkeepers to expand financial wellness programs, deploy AI-driven smart nudges, and integrate retirement education earlier, especially during onboarding, when savings behaviors are first formed. With 78% of recent hires reporting that money shortages limit what they can do, the need for accessible, personalized support is more urgent than ever.
Media Contact:
Tim Rouse, Executive Director, SPARK Institute
508-838-1919
tim@sparkinstitute.org
About SPARK Institute
The SPARK Institute represents the interests of a broad-based group of retirement plan service providers and investment managers, collectively serving over 100 million participants. SPARK is committed to advancing best practices, innovation, and education across the retirement ecosystem.
About Corporate Insight
Corporate Insight delivers competitive intelligence and user-experience research to the nation’s leading financial institutions. Its financial literacy research focuses on understanding emerging demographics and supporting the retirement industry with actionable insights.