‭Full Year Course‬

‭7.8 The Importance of Investing for Retirement‬

‭Lesson Guide‬
‭UNIT: INVESTING‬

‭Learning Objectives‬ ‭Jump$tart Standards‬

‭Students will be able to‬
‭●‬ ‭Investigate how investing can be a powerful tool‬
‭to meet your retirement goals‬
‭●‬ ‭Explain why most Americans cannot rely on‬
‭Social Security and pensions alone for retirement‬
‭●‬ ‭Explore factors that can impact how much you‬
‭might need in retirement and your ability to‬
‭meet your retirement savings goal‬
‭●‬ ‭Understand the growing popularity of the F.I.R.E.‬
‭movement‬
‭Investing‬
‭●‬ ‭4a: ​Describe the impact of inflation on prices over‬
‭time‬
‭Earning Income‬
‭●‬ ‭10a: Identify different potential sources of‬
‭retirement income‬
‭●‬ ‭10b: Describe the importance of having multiple‬
‭sources of income in retirement, such as Social‬
‭Security, employer sponsored retirement plans,‬
‭and personal investments‬

‭Approximate Time‬
‭●‬ ‭Lesson length: 115 mins‬

‭Distribute to Students‬ ‭Plan Your Unit‬

‭●‬ ‭Student Activity Packet FY-7.8‬ ‭‬
● ‭ nit Plan for Investing‬
U
‭●‬ ‭Investing on www.ngpf.org‬
‭●‬ ‭Customizable Parent Newsletter: Investing‬

‭LESSON PLAN‬

‭Resources‬ ‭Questions‬ ‭Est. Time‬

‭1‬ ‭QUESTION OF THE DAY‬

‭●‬ ‭What is the average‬
‭ UESTION OF THE DAY: What is the average amount of‬
Q
‭retirement savings for 20-29 year olds?‬
‭5 mins‬

‭amount of retirement‬ ‭Answer the question on the first slide in the box. Then,‬
‭savings for 20-29 year‬ ‭compare your answer to the answer on the second slide.‬
‭olds?‬ ‭Finally, follow your teacher’s directions on how to answer the‬
‭●‬ ‭Publisher: NGPF‬ ‭follow-up questions on the last slide.‬
‭1.‬ ‭What is the average amount of retirement savings for‬
‭20-29 year olds?‬

‭2‬ ‭ARTICLE‬
‭●‬ ‭What is Retirement?‬
‭ hat is Retirement?‬
W
‭As you know, investing is a great way to build wealth for your‬
‭10 mins‬

‭●‬ ‭Publisher: The Balance‬
‭future - especially retirement! Retirement may seem a long‬
‭way off, but it’s never too early to understand what it is and‬
‭how you can best prepare for it! Read this article to learn more‬
‭about what retirement actually is and how you can get there.‬
‭Then, answer the questions.‬
‭1.‬ ‭What types of income can you use in retirement to‬
‭support yourself?‬
‭2.‬ ‭Social security defines the full retirement age for those‬

‭www.ngpf.org‬ ‭Last updated: 10/20/22‬

‭1‬

‭3‬ ‭INFOGRAPHIC‬
‭●‬ ‭What is Social‬
‭Security?‬
‭●‬ ‭Publisher: Social‬
‭Security Administration‬
‭VIDEO (7:27)‬
‭●‬ ‭Will Social Security Be‬
‭Around for Millennials?‬
‭●‬ ‭Publisher: Two Cents‬
‭4‬ ‭ARTICLE‬
‭●‬ ‭Pension Plan vs. 401(k):‬
‭ ension Plan vs. 401(k): Types, Pros & Cons‬
P
‭The previous resources have also all mentioned‬‭pensions‬‭,‬
‭Types, Pros & Cons‬
‭●‬ ‭Publisher: NerdWallet‬
❖
‭ ‬ ‭Teacher Tip:‬‭The article‬ ‭more about what pension plans are. Then, answer the‬
‭talks about 401(k)s.‬
‭Note that students will‬
‭learn more about these‬
‭accounts in the next‬
‭www.ngpf.org‬
‭ orn in 1960 or after as 67. Does this surprise you? Why‬
b
‭or why not?‬
‭ .‬ ‭While most Americans want to retire, the unfortunate‬
3
‭reality is that many don’t have enough saved up to do‬
‭so. Why do you think this is?‬
‭ hat is Social Security? Will Social Security Be Around for‬
W
‭Millennials?‬
‭10 mins‬
‭As the previous article stated, many people rely on Social‬
‭Security in retirement. However, you may have repeatedly‬
‭heard from the media that Social Security may not be around‬
‭for much longer. Read through this infographic to learn more‬
‭about this government program and who it aims to serve.‬
‭Then watch the video to learn about the future of Social‬
‭Security. Finally, answer the questions.‬
‭1.‬ ‭Which statement best describes what Social Security‬
‭is and how it works?‬
‭a.‬ ‭Social Security is a mandatory payroll‬
‭deduction for current workers who then‬
‭receive the retirement benefit on an annual‬
‭basis.‬
‭b.‬ ‭Social Security is an optional program to allow‬
‭retirees to continue contributing to their‬
‭individual retirement accounts.‬
‭c.‬ ‭Social Security is a government program that‬
‭pools contributions from current workers to‬
‭then provide retirement support benefits to‬
‭those who are eligible.‬
‭d.‬ ‭Social Security is a federal health insurance‬
‭program for retired workers.‬
‭2.‬ ‭Why are people worried about the future of Social‬
‭Security?‬
‭3.‬ ‭What solutions are presented to fix the Social Security‬
‭shortfall? (hint: choose three correct answers)‬
‭a.‬ ‭Stop distributing benefits to workers who do‬
‭not pay into the system‬
‭b.‬ ‭Reduce benefits to match income from payroll‬
‭taxes‬
‭c.‬ ‭Increase the Social Security tax rate‬
‭d.‬ ‭Raise the age of retirement for younger‬
‭workers‬
‭4.‬ ‭While Social Security benefits millions of Americans,‬
‭the system is not perfect. In what ways is inequality‬
‭built into the Social Security system?‬
‭5.‬ ‭What points from this video can you use to explain‬
‭why it’s important to invest for retirement?‬
‭8 mins‬
‭which is another type of income that some Americans may‬
‭rely on in retirement. Read this article, stopping at‬‭What If I‬
‭Don’t Have Access to a Pension Plan or a 401(k)?‬‭,‬‭to learn‬
‭questions.‬
‭1.‬ ‭In your own words, briefly describe what a pension is.‬
‭2.‬ ‭Which of the five main differences listed in the chart‬
‭401(k)s vs Pension Plans‬‭, stands out to you? Why?‬
‭Last updated: 10/20/22‬
‭2‬
 ‭lesson.‬

‭5‬ ‭REFERENCE‬
‭●‬ ‭Defined-Benefit‬
‭ efined-Benefit Pension Plans Are on the Wane &‬
D
‭Retirement Benefit Access, Participation, and Take-up‬
‭7 mins‬

‭Pension Plans Are on‬ ‭Rates for Union and Nonunion Civilian Workers‬
‭the Wane‬ ‭While pensions can be a great retirement savings plan, fewer‬
‭●‬ ‭Publisher: Center on‬ ‭employers offer them today than they previously did. Analyze‬
‭Budget and Policy‬ ‭the data in these two graphs to learn more and answer the‬
‭Priorities‬ ‭questions.‬
‭1.‬ ‭Describe the overall trends in the percentage of‬
‭REFERENCE‬ ‭full-time workers covered by a pension plan.‬
‭●‬ ‭Retirement Benefit‬ ‭2.‬ ‭A union is a group of workers who work together to‬
‭Access, Participation,‬ ‭negotiate their salary, benefits, and hours.‬‭According‬
‭and Take-Up Rates for‬ ‭to the second graph, what is the difference in‬‭access‬
‭Union and Nonunion‬ ‭to pensions (defined benefit retirement plans)‬
‭Civilian Workers‬ ‭between union and nonunion workers?‬
‭●‬ ‭Publisher: U.S. Bureau‬ ‭3.‬ ‭Teachers, government employees, nurses, utilities‬
‭of Labor Statistics‬ ‭workers, and construction workers are often union‬
‭jobs. Why do you think union jobs are more likely to‬
‭have pensions?‬

‭6‬ ‭ACTIVITY‬
‭●‬ ‭ANALYZE: Investing for‬
‭ NALYZE: Investing for Retirement‬
A
‭By now you know that investing for retirement is really‬
‭25 mins‬

‭Retirement‬ ‭important, and maybe even necessary, for a variety of reasons.‬

‭●‬ ‭Publisher: NGPF‬ ‭Let’s take a closer look at why investing for retirement‬‭as early‬
‭as possible‬‭is also key! Follow the directions on‬‭the worksheet‬
‭to complete this activity and to understand the power of‬
‭investing as soon as you can.‬

‭7‬ ‭VIDEO (5:41)‬

‭●‬ ‭How Much Savings Do‬
‭ ow Much Savings Do You Need To Retire?‬
H
‭You want to start investing and want to start now. Awesome!‬
‭10 mins‬

‭You Need To Retire?‬ ‭But, how much do you anticipate you’ll need in retirement?‬
‭●‬ ‭Publisher: SmartZone‬ ‭What’s your goal? The answers to those questions depend on‬
‭Finance‬ ‭a variety of factors and personal preferences. Watch this video‬
‭to understand how you can determine how much you might‬
‭need. Follow your teacher’s directions to answer the questions‬
‭either within the EdPuzzle itself or on this document.‬

‭ OTE: EdPuzzle videos shuffle answer choices and do not‬

N
‭always match the order provided in the lesson here.‬

‭1.‬ ‭ hy will you need slightly more income in each year‬

W
‭of your retirement?‬
‭a.‬ ‭Your expenses increase the longer you are in‬
‭retirement.‬
‭b.‬ ‭Your rate of return on investments is‬
‭guaranteed to increase in retirement, so you‬
‭can spend more each year.‬
‭c.‬ ‭You are required to withdraw more money‬
‭each year from your retirement account‬
‭d.‬ ‭You should take the increasing price of goods‬
‭and services over time into account.‬
‭ .‬ ‭How can the length of your retirement impact how‬
2
‭much you might need to save for retirement? (hint:‬
‭choose two right answers)‬
‭a.‬ ‭The longer your retirement, the MORE money‬
‭you'll receive in government stipends and‬

‭www.ngpf.org‬ ‭Last updated: 10/20/22‬

‭3‬

‭8‬ ‭ACTIVITY‬
‭●‬ ‭CALCULATE:‬
‭Retirement Savings‬
‭Goals‬
‭●‬ ‭Publisher: NGPF‬
‭9‬ ‭FINCAP FRIDAY‬
‭●‬ ‭Playing With F.I.R.E.‬
‭●‬ ‭Publisher: NGPF‬
‭❖‬ T
‭ eacher Tip:‬‭If you are‬
‭short on time, have‬
‭students watch only‬
‭the video in this FinCap‬
‭Friday.‬
‭10‬ ‭EXIT TICKET‬
‭❖‬ T
‭ eacher Tip:‬‭To access‬
‭this Exit Ticket, please‬
‭see the Sample‬
‭Completed Student‬
‭Activity Packet (SSAP).‬
‭You can find this on the‬
‭Unit Page‬‭this resource‬
‭www.ngpf.org‬
‭programs.‬
‭b.‬ T ‭ he longer your retirement, the LESS you need‬
‭to have saved.‬
‭c.‬ ‭The longer your retirement, the MORE you‬
‭need to have saved.‬
‭d.‬ ‭The longer your retirement, the LESS money‬
‭you'll be able to withdraw each year.‬
‭3.‬ ‭Which of the following should you do when taking‬
‭your rate of return into account?‬
‭a.‬ ‭Assume an aggressive rate of return because‬
‭that is what the market guarantees.‬
‭b.‬ ‭Assume an aggressive rate of return because it‬
‭accounts for other income streams, such as‬
‭Social Security.‬
‭c.‬ ‭Assume a conservative rate of return so that‬
‭you can plan the worst but hope for the best.‬
‭d.‬ ‭Assume a conservative rate of return because‬
‭that is how the market is going to perform.‬
‭ .‬ ‭Why does the amount you need to save for retirement‬
4
‭increase from 1.5M to over 2.1M in this example?‬
‭a.‬ ‭You'll need more money each year in‬
‭retirement.‬
‭b.‬ ‭The federal government contributes to your‬
‭annual savings once you open a retirement‬
‭account‬
‭c.‬ ‭You're assuming you're going to earn more‬
‭each year so you can contribute more.‬
‭d.‬ ‭The increased amount each year takes‬
‭inflation into account.‬
‭ ALCULATE: Retirement Savings Goals‬
C
‭As you saw in the previous video, having a realistic goal for‬
‭20 mins‬
‭how much you might need in retirement can help you better‬
‭plan for your future. Let’s now take a look at how your savings‬
‭rate, the age you start investing, and other factors can impact‬
‭your ability to meet your goal! Follow the directions on the‬
‭worksheet to complete this activity.‬
‭ INCAP FRIDAY: Playing With F.I.R.E.‬
F
‭So far we’ve looked at the importance of investing so that you‬
‭15 mins‬
‭can retire in your 60s and 70s. However, there is a growing‬
‭trend among young people to retire‬‭well‬‭before that‬‭age!‬
‭Follow your teacher’s instructions to complete this FinCap‬
‭Friday on the F.I.R.E. movement!‬
‭ xit Ticket‬
E
‭Follow your teacher’s directions to complete the Exit Ticket.‬
‭5 mins‬
‭Last updated: 10/20/22‬
‭4‬
 ‭is in.‬

‭EXTEND THE LEARNING‬

‭DO MORE...‬ ‭LEARN MORE...‬

‭ACTIVITY‬ ‭ARTICLES‬
‭●‬ ‭READ: Retirement Basics‬ ‭●‬ ‭Retirement Without Savings?‬
‭●‬ ‭Publisher: NGPF‬ ‭●‬ ‭Publisher: Investopedia‬

‭EDPUZZLES‬ ‭‬
● ‭ hy Is There a Cap on the FICA Tax?‬
W
‭●‬ ‭Can You Really Retire in Your 30s?‬ ‭●‬ ‭Publisher: Investopedia‬
‭●‬ ‭Publisher: TwoCents‬
‭REFERENCE‬
‭‬
● I‭ s Retirement Even Possible?‬ ‭●‬ ‭Urban Institute's Public Pension Project‬
‭●‬ ‭Publisher: TwoCents‬ ‭●‬ ‭Publisher: Urban Institute‬

‭INTERACTIVE‬
‭●‬ ‭FinMango FIRE‬
‭●‬ ‭Publisher: FinMango‬

‭‬
● ‭ uizlet Vocabulary | Investing‬
Q
‭●‬ ‭Publisher: NGPF‬

‭FAST FACTS...‬
‭‬
● ‭ he average American predicts to retire at age 66 (Gallup, 2018)‬
T
‭●‬ ‭The average U.S. household had $255,200 in their retirement accounts in 2019, a 5% increase from 2016‬
‭(Magnify Money, 2020)‬
‭●‬ ‭Only 51% of American households have at least one type of retirement account (Magnify Money, 2019)‬

‭www.ngpf.org‬ ‭Last updated: 10/20/22‬

‭5‬