Are you likely to save for retirement?

I have some good news. Last week, I provided you with a test to take to determine whether you are “financially literate.”

The questions (called the “big three”) were developed by Annamaria Lusardi of the George Washington University School of Business together with Olivia Mitchell of the Wharton School of the University of Pennsylvania, described in their October 2011 paper, “Financial literacy around the world: an overview.” The big three became the worldwide industry standard for testing financial knowledge.

Back to the good news. Over 1,000 of you took the test, passing with flying colors. Ninetyfive percent of you got all three questions right.

What can I say? You, my readers, are superbly, astoundingly, almost perfectly financially literate.

There is more. It turns out that the professors created two more tests: a five question “basic” test and an eight-question “sophisticated” test, both described in their 2017 paper, “How Ordinary Consumers Make Complex Economic Decisions: Financial Literacy and Retirement Readiness” in the Quarterly Journal of Economics.

The basic test “captures people’s capacity to handle basic financial literacy concepts including compound interest, inflation, and the time value of money.”

The sophisticated test “is intended to capture sophisticated financial literacy … to measure more advanced financial knowledge such as the risk/return difference between stocks and bonds, how the stock market and risk diversification work, and the relationship between bond prices and interest rates.”

The professors’ studies show that Americans are weak in these concepts. “Financial illiteracy is widespread” among both the older and younger populations. “Most importantly, there is evidence that the least financially literate are the least likely to save for retirement.”

According to the professors, “Planning for retirement is a complex undertaking, requiring consumers to gather and process data on compound interest, risk diversification and inflation, and make assumptions about future asset market performance.”

As a decades-long proponent of financial literacy education, I cannot agree more. I see planning as the key to financial success, especially the kind of thinking ahead that needs to start early in life, well before the far-in-the-future retiree starts thinking about saving and investing for the very distant 30 or 40 years of life after work.

Since “financial literacy contributes importantly to retirement readiness,” you’ll want to test yourself. Go to www.juliejason.com/surveys for both the basic and the sophisticated tests, and last week’s “big three” test. See how you fare.

If you do not score well, keep in mind that “lack of financial knowledge is a major factor driving poor retirement planning,” in the professors’ words. That means it’s time to start studying, either on your own or perhaps through a 401(k) program at work.

If you do score well, congratulations. Considering that “there is a strong correlation between retirement planning and financial literacy,” you are on track to retirement success.

But, remember, more is needed: “Consumers making retirement savings decisions require substantial financial literacy, in addition to the ability and tools needed to plan and carry out these plans.”

Take the next step to actually put some effort into creating a plan for yourself. Start with a situation audit. If you need help

on how to proceed, read my book, “The Retirement Survival Guide,” which is available at libraries and bookstores.

If you already have a plan, use this opportunity to review it. Update the elements

of the plan. Make sure you have a competent retirement strategy that will allow you to retire securely.