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Guidelines for Participating in Employer Contribution Savings Programs

What guidelines are accepted for how to save/invest in company-contribution savings programs such as 401Ks when the person changes jobs every 2-5 years? Are strategies different than when you expect to invest in the same 401K (or similar vehicle) over 10-15 years? What do you need to know in terms of rolling savings from one employer plan to the next (or should you keep a bunch of pots going)?

I think such info is very pertinent for the young investor, who may not be taking advantage of an employer’s savings plan because they know they’re only going to be at a job for a couple years (or less) and think its not worth the hassle of investing, or don’t understand what the benefits are, even in the short term, of employer matches, etc. (Many of my friends are doing exactly this.)

Ancillary to this is that some young investors do take advantage of an employer savings program, but then don’t understand that it can roll into the new employer’s program, and thus the old employer “cashes out” and the investor gets a check for the remaining amount after those insane taxes. (This recently happened to my fiance with his 401K; his employer cashed it out before he could roll it. I check the mail, I never saw literature from the employer about rolling/transferring, so I am not even sure they gave him a heads up.)

In the changing job market, where permanency in a position is a thing of the past, understanding the level of fluidity in employer savings programs could be beneficial.

Alissa Genovese
Program Operations Specialist
Office of Research and Evaluation

May 13, 2010 at 10:36 am, by admin | No Comments | Category General

How vs. What

When was the last time you focused on the “how” instead of the “what” of your practice?

As financial educators and counselors, we often find our practice revolves around providing answers and information to those we serve. After all, bad advice or inaccurate information could mean financial ruin for someone. We spend hours on research, professional and continuing education, or learning the intricacies of products we might offer and their uses.

But when was the last time you reflected on exactly how you provided that information to its recipient? Who really are those recipients and how can you reach them best (in a knowledge building sense, not marketing)? When was the last time you reflected on your own skills as an educator of adults?

Often it is our expertise and the knowledge of its application to our subject that we measure to determine our proficiency as an educator. Yes, we must deeply know our material, but our knowledge alone it is not sufficient to ensure its successful transference to others. I propose that personal financial education is adult education and we should all dedicate a portion of our efforts to being effective educators of adults and not just subject matter experts.

So as you re-reflect on your new year’s resolutions, please also reflect on your educating. In the ongoing pursuit of excellence I suggest we all consider focusing part of our next continuing education, self-study, or formal training on the how of educating adults vs. the what.

-Ryan Ritter, MBA, AFC
Fort Leavenworth, KS

February 9, 2010 at 8:48 am, by admin | 6 Comments | Category General

New Year’s Resolution

How many of you have made progress on those New Year’s resolutions? And more importantly, how many of your clients or program participants have?

What are people doing that results in their making progress toward a resolution or goal?
How is that different than what those not making progress are doing?
What seems to motivate your clients to take action?

-Joyce Cavanagh
AFCPE President

February 4, 2010 at 9:39 am, by admin | 2 Comments | Category General

Effects of Unemployed Teens

Unemployment for Americans aged 16 to 19 is at an all time high – 27%. It’s a segment of our workforce that has been hard hit by the recession, yet largely overlooked. Though unemployment among adults is a pressing matter, the long term affects of unemployment among our youth is something we should be just as concerned about.

What affect will this have on teens’ work ethic?
Are there major consequences to young people not getting job experience in their most impressionable years?
Is this hindering their ability and interest to learn about financial literacy and money management?
Is this negatively shaping their views of money and finances or shifting it in some other way?
What are the psychological effects for teens that spend many months looking for a job only to be turned down repeatedly?
How does this affect their confidence and feeling of self worth/self esteem in a time when they are most self conscious?
Is this hurting some teens’ ability to gain higher education because they can’t find a job and save up for college, as many teens have had to do in the past?

The fact is these teens will soon be young adults out in the real world and a large part of our work force. The affects of teen unemployment is a discussion worth having as it may affect how financial educators approach and work with this age group for years to come.

Ace Elliott
Debtfreeu.org
Director of Content / Project Manager

January 26, 2010 at 11:34 am, by admin | 5 Comments | Category General