Teacher Says Teens Should Invest Early

How much do teenagers know about financial planning including 401(k)s, social security and investments? A recent survey by Junior Achievement USA and AIG suggests teenagers are concerned about their financial future, but lack proper education on how to plan for it.

Nearly 64 percent of teenagers who were asked are concerned about their parents retirement plan, but demonstrated a lack of education regarding their own financial longevity with 69 percent of individuals from the ages of 13-18 admitting they know little or nothing about financial planning.

“The state needs to put more emphasis on saying, ‘Hey this is something that needs to be incorporated into everyone’s curriculum,'” said David Munella, transition coordinator at Jamestown Public Schools.

Munella also teaches in the business department at Jamestown High School where he has observed a shrinking emphasis on financial education. He noted that it wasn’t a district decision to shrink the department, but a statewide shift that focuses more intensely on other topics.

“A lot of what we used to teach, we can’t offer anymore,” he said.

The business department is comprised of Intro to Business, Accounting, Computer Application, Personal Finance, Careers, Hospitality and Tourism, Business Law and a web design class.

The Personal Finance class is a 10-week course that focuses on personal banking, credit and interest as well as 401(k), social security and investments.

“We try to keep to the most important elements,” Munella said.

The survey, produced by Junior Achievement USA, a financial literacy youth organization, and AIG, the finance and insurance company, revealed 34 percent of respondents believed they would retire by the age of 60, but simultaneously one-third thought they would need less than $5,000 to do so.

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Additionally, those surveyed described their ideal retirement as traveling, golfing, volunteering and splurging on vacation homes. Forty-six percent of those same teens admitted to not fully understanding how to plan for retirement.

Admitting his bias, Munella said he believes there should be a larger focus in the district and from the state on how students are taught about financial education.

“I think it’s grown,” he said about the efforts to increase financial education, “but I still think that we are in so much more need of recognizing that this should be a huge part of what is offered and not just here, I’m talking across the board.”

Jamestown recently reintroduced a credit union within the high school. Munella said the presence of the credit union allows students to get first-hand experience with banking. In addition, students are offered internships through the company.

Also, Munella recently took six students from his business class to compete in the annual Junior Achievement USA Stock Market Challenge. Each fall, students are able to participate in the event.

“I’m sure some schools have strong programs,” Munella continued while also acknowledging Jamestown’s strengths within its business department. “A lot of it comes down to what schools have what resources and sometimes you’re handcuffed as to what you can offer.”

The survey determined 49 percent of respondents were able to identify 401(k)s, 33 percent knew what annuities are and 61 percent understood social security. It also stated 51 percent were not confident Social Security would still exist when it’s time for the surveyed teenagers to retire. It noted that, while knowing the definition of annuities, only 21 percent identified it as a protected source of lifetime income.

“We are on a mission to ensure that every American achieves a secure, fulfilling retirement, and that includes kids,” said Rob Scheinerman, President of Group Retirement for AIG. “The findings we uncovered with Junior Achievement make it clear that we must work with parents and educators to provide teens with greater financial education so they can truly understand what it takes to plan for and achieve the retirements they desire.”

The survey revealed that while the majority of those who were asked admitted to a lack of understanding of financial planning, 93 percent of them believed it was important. Ninety-two percent of respondents said a personal finance course would be beneficial in high school. The survey also asked teenagers when they thought they should start planning for retirement and the average response was 29.

“If I can give you one piece of advice,” Munella told The Post-Jounal what he tells all of his students. “Invest early.”