‭Full Year Course‬

‭7.9 How to Invest for Retirement‬

‭Student Activity Packet‬
‭UNIT: INVESTING‬

‭Name:‬

‭In this lesson, you will learn to:‬

‭‬
● ‭ xplain the advantages of a 401(k).‬
E
‭●‬ ‭Analyze who has access to 401(k) accounts and identify alternatives for people who aren’t offered them.‬
‭●‬ ‭Compare different types of retirement accounts, including Roth IRAs, traditional IRAs, 401(k)s, and pensions.‬
‭●‬ ‭Simulate signing up for a 401(k) or IRA account.‬

‭RESOURCES‬ ‭QUESTIONS‬

‭Estimated time: 5 mins‬

‭1‬ ‭ ow much would I need‬

H
‭to save monthly to have $1‬
‭1.‬ ‭How much would I need to save monthly to have $1 million when I retire?‬

‭million when I retire?‬

‭Answer the question on the‬
‭first slide in the box. Then,‬
‭compare your answer to‬
‭the answer on the second‬
‭slide. Finally, follow your‬
‭teacher’s directions on how‬
‭to answer the follow-up‬
‭questions on the last slide.‬

‭Estimated time: 8 mins‬

‭2‬ ‭F‭the
inCap Friday: Say “OK” to‬
401k‬
‭ 401(k) is one of the‬
A ‭a.‬ ‭special type of business plan‬
‭popular retirement‬
‭investment accounts.‬
‭Watch the video to learn‬
‭about the advantages of a‬
‭401(k) and answer the‬
‭questions.‬
‭1.‬ ‭A 401(k) plan is a ________‬
‭b.‬ ‭bank account specifically for entrepreneurs‬
‭c.‬ ‭benefit for workers making $401,000 or less‬
‭d.‬ ‭benefit that helps workers invest for retirement‬
‭2.‬ A
‭ bout how much more does money grow when it’s invested rather than‬
‭deposited in a traditional savings account?‬
‭a.‬ ‭About 10 times more‬
‭b.‬ ‭About 50 times more‬
‭c.‬ ‭About 100 times more‬
‭d.‬ ‭About 500 times more‬

‭3.‬ H
‭ ow can you invest for retirement if your employer does not offer a 401(k)‬
‭plan?‬
‭a.‬ ‭You simply wouldn’t be able to invest‬
‭b.‬ ‭Open a 401(k) from a relative’s employer‬
‭c.‬ ‭Open an Individual Retirement Account‬
‭d.‬ ‭Open a 501(c)(3) instead‬

‭www.ngpf.org‬ ‭Last updated: 6/17/21‬

‭1‬
 ‭4.‬ ‭What is one example of a service offered by a brokerage?‬
‭a.‬ ‭Offering certificate of deposit accounts‬
‭b.‬ ‭Offering high yield savings accounts‬
‭c.‬ ‭Allowing customers to buy/sell stocks‬
‭d.‬ ‭Allowing customers to sell goods online‬

‭5.‬ H
‭ ow much of your income do experts recommend investing in a 401(k)‬
‭account?‬
‭a.‬ ‭5%‬
‭b.‬ ‭7%‬
‭c.‬ ‭10%‬
‭d.‬ ‭12%‬

‭Estimated time: 5 mins‬

‭3‬ ‭ xample 401(k) Growth‬

E
‭How do your retirement‬ ‭1.‬ ‭ ased on your current rate of contribution, how much will you have saved‬
B
‭savings grow? Imagine you‬ ‭for retirement?‬
‭graduate from college at 22‬
‭and find a job that pays‬
‭$50,000 per year. You‬
‭decide to contribute 10% to‬ ‭2.‬ A
‭ pproximately what percentage of your balance at retirement comes‬
‭your 401(k) and your‬ ‭directly from your personal contributions?‬
‭employer matches to‬
‭contribute 4%. Analyze the‬
‭graph and answer the‬
‭questions.‬ ‭3.‬ I‭ f your employer did not match your contributions at all, how much less‬
‭would you have at retirement?‬

‭4.‬ H
‭ ow does your account growth demonstrate the importance of investing‬
‭early?‬

‭Estimated time: 15 mins‬

‭4‬ ‭W hy the 401(k) Won’t Fix‬

‭the U.S. Retirement Crisis‬
‭1.‬ ‭ hat percentage of private-sector workers are NOT eligible for a 401(k)‬
W
‭plan?‬
I‭ n the previous resources,‬
‭you learned why 401(k)s‬
‭are great investment‬
‭vehicles. Unfortunately,‬
‭many employers don’t‬ ‭2.‬ ‭Identify three groups of workers who are often not eligible for a 401(k).‬
‭offer a 401(k), so not‬
‭everyone has the option to‬
‭invest in a 401(k).‬

‭ ead the article to learn‬

R ‭3.‬ H
‭ ypothesize - how do you think we could reduce wealth inequality at‬
‭retirement?‬
‭more about the state of‬
‭retirement savings and‬
‭who is impacted by these‬
‭inequities. Then, answer‬
‭the questions.‬

‭www.ngpf.org‬ ‭Last updated: 6/17/21‬

‭2‬
 ‭Estimated time: 8 mins‬

‭5‬ I‭ RA vs 401k‬
‭If your employer doesn’t‬ ‭1.‬ ‭What are two significant advantages of a 401(k) over an IRA?‬
‭offer a 401(k), there are other‬
‭options! Anyone can open a‬
‭personal retirement‬
‭account, called an IRA, to‬
‭get many of the same‬ ‭2.‬ ‭What are the tax advantages of investing in a 401(k) or IRA?‬
‭benefits as a 401(k).‬
‭Watch the video, read the‬
‭article, and answer the‬
‭questions.‬
‭3.‬ ‭According to the article, who should invest in a Roth retirement account?‬

‭Estimated Time: 20 mins‬

‭6‬ ‭COMPARE: Types of‬

‭ etirement Accounts‬
R
‭At this point, you’ve‬
‭learned about pensions,‬
‭401(k)s, Roth IRAs, and‬
‭traditional IRAs. In this‬
‭activity, you’ll compare‬
‭the features of each type‬
‭of account. Follow the‬
‭instructions on the‬
‭worksheet to complete‬
‭the activity.‬

‭Estimated time: 10 mins‬

‭1.‬ ‭ ection 1 talks about how some investors like to make investment‬
S
‭7‬ ‭H‭anowIRA‬
and Where to Open‬
‭decisions, whereas others like to keep it as simple as possible. What type‬
‭ o you’ve learned all about‬
S ‭of investor are you - hands-on or hands-off? Why?‬
‭investing for retirement, but‬
‭how do you actually get‬
‭started? You have to‬
‭identify your investment‬
‭style, choose a brokerage,‬
‭and open an account. Read‬ ‭2.‬ I‭ f you’re a hands-on investor who doesn’t want a robo advisor, what‬
‭the article, then answer the‬ ‭should you look for in a brokerage?‬
‭questions.‬

‭3.‬ ‭What information will you likely need to open the account?‬

‭www.ngpf.org‬ ‭Last updated: 6/17/21‬

‭3‬
 ‭Estimated time: 40 mins‬

‭8‬ ‭ OLEPLAY: Sign up for an‬

R
‭IRA‬

‭ OLEPLAY: Sign up for a‬

R
‭401(k)‬
‭In the previous activity, you‬
‭learned the key decisions‬
‭you’ll need to make to start‬
‭investing for retirement. In‬
‭this activity, you’ll walk‬
‭through the process of‬
‭signing up for a 401(k) or‬
‭IRA, then selecting‬
‭investments.‬

‭ hoose one of the activities,‬

C
‭depending on which‬
‭account type you’re‬
‭interested in. Follow the‬
‭instructions on one‬
‭worksheet to complete the‬
‭activity.‬

‭Estimated time: 5 mins‬

‭9‬ ‭ xit Ticket‬

E
‭Follow your teacher’s‬
‭directions to complete the‬
‭Exit Ticket.‬

‭www.ngpf.org‬ ‭Last updated: 6/17/21‬

‭4‬