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Posted by Ray
Asked on January 14, 2016 7:10 am
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I’m currently a high school student (and intern here at NGPF) and thinking about retirement does not excite me either but I think the best way to motivate them is to show students examples of people who have saved and who have not saved. Watching videos about people who suffer from student debt really motivated me to look for more scholarships and I think it would have the same effect on motivating me to save for the future. Learning that my 401k will not be taxed motivates me to put money into it so I think educating students about the benefits is also great.

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Posted by Ren Makino
Answered on January 14, 2016 3:55 pm
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I share the time value of money concept in my classes. I share an example using Excel to show them how starting early compared to starting later can impact the amount they would have at retirement. I show them how one person puts $2,500/year in retirement from age 21-28 (total of $20K invested) and compare that to a person that starts at age 29 and invests $2,500/year until age 60 (total of $80K invested). Both earn 12% rate of return. The first investor ends up with close to $1.3 million at age 60 where the second person who invested four times as much has just over $850K. This ten year period of waiting cost them just over $440K in return as well as investing $60K more.

I like to take this discussion to different online financial calculators that students can use to see what investing can grow to based on saving a small amount each month over a period of years until retirement. They can see how a slight change in the budget and reallocating those dollars to savings can have such a big impact on them so they don’t retire with no savings.

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Posted by kossjoe1999
Answered on January 15, 2016 8:30 am
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One of my former students (~age 25) is friends with me on Facebook and was asking all of his friends for their opinion: Should he get a nice, comfortable, larger apartment OR a substantially smaller one that was slightly closer to work and $500 per month cheaper. In the comments section, there were many in favor of the comfortable lifestyle (comfort = happiness), and far fewer saying to save or invest (my suggestion) that extra $500 per month. $500/mo for the next 40 years in an index fund??? Are you kidding me?!?!?!

Anyway, my point is, I, too, love online calculators (bankrate.com has a ton!), but my recent facebook experience made me realize how important the context is. “Save $500 per month for retirement” sounds like, “OK, but where am I going to get $500 extra per month to invest? That’s insane!” to a young person. “Live in a slightly smaller apartment with less commuting time and legitimately take the $500 you are otherwise going to pay every month in rent and put it toward retirement” all of a sudden sounds a little more compelling. Then, you can start using the calculator to say, “OK, well, what if you do the small apartment for a year, then upgrade” or, “Wait until your 30 to live in a fancier place” or “Take the small apartment now, and any time you get a raise, put half toward a larger retirement contribution and half toward a nicer apartment.” Where do you end up when you try each of those ideas in the calculator?

I think a good story and a realistic scenario help tremendously to get students thinking.

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Posted by Jessica Endlich
Answered on February 1, 2016 10:26 pm
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This is a fun, online tool from Merrill Edge (Bank of America) that uses Behavioral Finance to help students “see” what they could look like in retirement.

http://faceretirement.merrilledge.com/

Something to try in the classroom!

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Posted by SashWhitGrabby
Answered on February 2, 2016 11:21 am
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