Worryingly, one-third of respondents got all three questions wrong.

"Financial illiteracy is reaching dangerous levels in Australia," said the study's author, Bond University's associate professor of statistics Adrian Gepp.

"People tend to be overconfident of their financial knowledge and skills. Financially illiterate people are more likely to experience asset loss and outlive their savings after retirement."

The study, which involved more than 3400 members of National Seniors Australia, found women were the most at risk of making bad financial decisions, while those who were unmarried, suffered poor health or were the most elderly also recorded poor results.

Dr Gepp urged Australians to talk to their parents and grandparents about their financial position and decisions.

"Don't assume they know what they are doing and make sure you check to see they are managing their finances appropriately," he said.

Bond University PhD candidate Rui Xue said super, insurance and other fund providers should design tailored products for elderly customers, particularly focused on those with low financial literacy.

"Personalised products would be much easier to understand and make users more likely to optimise their income streams," he said. Examples might include free online and mobile apps, as well as gamified learning.

In a separate study, new research has found retired Australians want financial security and peace of mind but feel locked into "gambling" their life savings on sharemarket-dominated superannuation.

That is a key finding of research launched by National Seniors Australia titled "Feeling financially comfortable? What retirees say."

The report points to a failure of the super system to help retirees safely convert their savings into reliable income that will last for life.

The research revealed conflict between stated "risk appetite" and investment behaviour.

It found more than 25 per cent of retirees who claim they can't tolerate a loss of more than 5 per cent invest all their retirement savings in the share market; a further 43 per cent invest some of their savings.

National Seniors chief executive John McCallum said that in the wake of the 2007-08 global financial crisis, many retirees felt they had little option but to continue to "gamble" with their savings in the sharemarket, despite having a low tolerance for risk.

"When members reach retirement, the risk of managing their superannuation savings shifts from the super fund trustee to the retiree who may have little experience with this," Professor McCallum said.

The study found those who had secure income for life, such as those with defined benefit pensions, had higher levels of financial comfort than those with market-linked retirement savings.

At the same time it found investment comfort levels were relative to personal values and social groups, and were not simply defined by a dollar figure.

The research found that than half of retirees are worried about outliving their savings, with women more than 40 per cent more likely to worry than men.

Almost 30 per cent of respondents said they regretted not contributing more to their super and retirement savings, and a further 30 per cent felt that contributing more was not an option for them.

Of those who said they regretted not saving more for retirement, 70 per cent were women.

Retirees who had combined the age pension with other income sources also reported a greater sense of financial security, as did those who had actively planned for retirement. This suggests that higher levels of financial literacy can lead to more positive outcomes for retirees.

See the full report here. It was based on data compiled from the National Seniors Social Survey conducted between February 14-April 29, 2018 and a series of follow-up telephone interviews conducted with 33 survey respondents aged 70-80 between October 13-December 12, 2018. The study focused on the feelings of 'financial comfort' of people with savings in the range of $100,000-$1.5 million.