MyMoney Resources - Teacher

Increased policy and academic attention has been placed on promoting retirement savings early in the life course. This study investigates the extent to which retirement savings behavior among young persons, a population for which retirement savings is important but typically low, differs by marital status. We draw national survey data on young adult households (ages 22 – 35; N = 3,894) from the U.S. Federal Reserve Board’s Survey of Consumer Finances (SCF). Results reveal considerable differences by marital status. Controlling for important characteristics, young adults who were married were more likely than all other groups (including cohabitors) to perceive retirement as an important savings goal and to have an individual retirement account. Married persons were more likely than their single counterparts to participate in a defined contribution pension plan. Single women fared particularly poorly on retirement savings outcomes. A range of possible theoretical links between marriage and retirement savings at young adulthood are discussed.

Traditional economic theory posits that people make decisions by maximizing a utility function in which all of the relevant constraints and preferences are included and weighed appropriately. Behavioral economists and decision-making researchers, however, are interested in how people make decisions in the face of incomplete information, limited cognitive resources, and decision biases. Empirical findings in the areas of behavioral economics and judgment and decision making (JDM) demonstrate departures from the notion that man is economically rational, illustrating instead that people often act in ways that are economically suboptimal. This article outlines findings from the JDM and behavioral-economics literatures that highlight the many behavioral impediments to saving that individuals may encounter on their way to financial security. I discuss how behavioral and psychological issues, such as self-control, emotions, and choice architecture can help policymakers understand what factors, aside from purely economic ones, may affect individuals’ savings behavior.

The majority of research on the retirement decision has focused on the health and wealth aspects of retirement. Such research concludes that people in better health and those enjoying a higher socioeconomic status tend to work longer than their less healthy and less wealthy counterparts. While financial and health concerns are a major part of the retirement decision, there are other issues that may affect the decision to retire that are unrelated to an individual’s financial and health status. Judgment and decision-making and behavioral-economics research suggests that there may be a number of behavioral factors influencing the retirement decision. The author reviews and highlights such factors and offers a unique perspective on potential determinants of retirement behavior, including anchoring and framing effects, affective forecasting, hyperbolic discounting, and the planning fallacy. The author then describes findings from previous research and draws novel connections between existing decision-making research and the retirement decision.

Tips to help you avoid spending more than you have to — or responding to a bogus offer posted by a scammer.

This article discusses the results of and lessons learnt from the Financial Opportunities Project (FOP), a comprehensive effort by the Center for Economic Progress identify, implement, and disseminate strategies for integrating financial services and asset-building opportunities with community-based tax-preparation services at IRS Volunteer Income Tax Assistance (VITA) sites. The goal of the FOP was that 15 percent of tax clients would take on an asset building service, an improvement from the 8-12 percent take-up rate achieved in past pilot studies by the Center and tests on the take-up of savings matches or Savings Bonds. The Center developed the Asset Building Service Delivery System (ABSDS)—a process-based model for offering asset-building products and services to clients served by community-based programs. The components of the ABSDS include 1) strategic program planning around asset promotion, 2) simplicity in process design, 3) specialization of staff to promote assets, 4) specific and targeted promotional strategies, and 5) customer-focused processes. From the fall of 2008 through the end of the 2009 tax season, the Center oversaw the national launch of the ABSDS and awarded three programs grants to assess the effectiveness and versatility of the op- erational models and programmatic guides of the ABSDS. To the extent programs adapted the model and tested new ideas, this season provided an opportunity to further refine the ABSDS. Overall, take-up rates surpassed expectations, with almost 27 percent of clients enrolled in at least one service. The article provides a more detailed overview of the FOP findings and identifies recommendations for improved delivery of asset building services, concluding that such tax programs can effectively include simple messages and financial education to encourage savings and improve financial management skills.

This article presents best practices and lessons learnt from on the experiences of the National Endowment for Financial Education® (NEFE), a private, nonprofit, nonpartisan and noncommercial foundation committed to increas- ing access to financial education and to empowering in- dividuals to make positive and sound financial decision. These lessons include tailoring programs to the needs of different market segments; delivering education continuously through different life stages and at "teachable moments"; recognizing the importance of partnerships; paying attention to the repetition and targeting of messages and focusing on evaluation and behavioral change.

This short article briefly summarizes and provides a link to the final report on the FDIC Survey of Bank Efforts to Serve the Unbanked and Underbanked. The survey was conducted in 2008 and the report was released in 2009. The FDIC retained Dove Consulting to help administer the survey of banks during 2008. The voluntary survey consisted of mail-in questionnaires administered to a stratified random sample of about 1,300 banks. The nationally representative sample was selected from the population of federally insured banks and thrifts with retail branch operations. In all, 685 complete surveys were returned, including 24 of the 25 largest banks. The survey finds that while most banks are aware that their market areas include significant unbanked and underbanked populations, relatively few have made it a strategic priority to target these market segments. In addition, while a number of banks are trying to reach the unbanked and underbanked, relatively few participate in the types of outreach that are thought to be particularly effective. The survey findings also indicate that although banks recognize the challenges associated with doing business with unbanked and underbanked individuals, they are making some progress in improving the accessibility of banking services.

This article provides a plain-language description of behavioral economics and the role of common biases in financial decisionmaking, and reviews ways in which the findings of behavioral economics can help structure financial education and public policy.

This article provides an overview of bank-based financial education. The role of banks more generally is reviewed, and examples of Marshall and Isley (M&I) Bank's Consumer Education (CE) program are discussed. Evaluation methods used by M&I are described. Key factors for success include clearly defined priorities, a standardized high-quality curriculum, appropriately designed delivery, well-integrated assessment and evaluation, effective community partnerships and a willingness to provide supporting tools.

This article provides a brief overview of the field of financial education and explores some of the challenges and potential solutions. The author describes developments in the contemporary financial education movement since the 1990s and the background economic changes that stimulated its growth; reviews currently available financial education initiatives for youth and adults and discusses the evidence about its effectiveness as well as broader challenges for the field. The article concludes by highlighting both general and specific examples of efforts to move the field forward.