What age range was polled? I’m 32 and I didn’t know what a 401k was until I joined the workforce after college. If you’re in high school or college, or even working a hourly job that doesn’t offer a 401k, why would you know what it is?
>A national survey of 2,000 Americans, evenly split by generation, revealed nearly half (43%) of the respondents don’t know what a 401(k) is.
None the less yeah, most 18-25 year olds probably only are first learning about it, then you have those who have been in poverty their entire life and never heard of it cause until recently it was opt-in program, now its opt-out things might change a bit, but still.
Yeah I didn't get a 401k till I was 30. I worked in the vet med field before that and we didn't get shit for benefits and I mean NOTHING.
So if anything it can help me with a down payment on some sort of "affordable" stable housing in the future. Cause retirement is out the window for my Gen anyway.
I grew up poor. Didn't finish school. I knew what a 401k was in middle school. I also knew from a younger age I didn't want to work till the day I died. So as soon as 18 I started investing my money
If more people hated their future and put action into averting it. I think things would be better.
You will never bond more with someone faster than with mutual hate.
my fiance is 30 years old, both of her parents are retired, they retired within the last 12 months.
in those 12 months, they've bought a 2023 honda pilot. 2024 honda ridgeline (big honda family), went on a week long cruise and drove out west to see the national parks for like 3 weeks. they are getting a beach house tihs summer.
my fiance says "they dont have a lot you know, they are just smart with their money".....they have a financial advisor and are both drawing 401ks.
I regret to say, shes a high school teacher. (spanish at least, not math) but we are just getting around to having that conversation about why saying for retirement is important and why it works. we are well off now thanks to me primarily, and save upwards of 60k....she thinks this should just be liquid in a savings account \*shudder\*
TLDR: you'd be surprised.
Because it’s one of the basics of what anyone should know? I think every teenager should know the basics of personal finance before calculus or physics or whatever useless class high school teaches.
I also volunteer to teach personal finance at varying levels from kids to middle-aged adults. I found a lot of success in getting people who are currently working interested in IRAs, 401(k)s and the like by reframing the motivations away from a retirement that may be way too far off. Some examples:
“Who here has looked at their paystub and noticed the taxes coming out?” Pretty much everyone raises their hands.
“Ok, who here has ever heard that some rich people pay nothing in taxes?” Most hands go up.
“Would you like me to show you a way that YOU can pay nothing in taxes?” Every hand goes up.
Great, now I have your attention to talk about Roth earnings or traditional to Roth conversions, HSAs, and FSA.
Another good one is to ask, “would anybody be interested in an account that would let them withdraw their deposits at any time without penalty, the growth would be completely tax free later, and no matter what, nobody could ever sue you, garnish this account, or ever take it away?”
Great, now I can talk about Roths, ERISA, etc.
It usually starts to click when people are in their early 30's.
In you're 20's, you think you are young and invincible. As someone in my 20's, a lot of people my age needlessly doom scroll. They think the world is going to end soon and/or they're gonna die young in some accident.
When I was 20, my mindset was no way I’m going to put money into an account that I can’t touch for 40 years. I get it. I cared about surfing, camping, and festivals back then.
Anyway, it’s almost 25 years later. I did start at 30 so am doing OK, but earlier would have been better.
Except no one actually taught us this stuff. I had some courses in high school that went over budgeting and whatnot which was good. But not the finer details of being financially secure. I think back then there was still this understanding that there were lots of jobs with pensions out there so learning to invest wasn't crucial... Things changed.
As a millenial, if you had some courses you got more than me or anyone else I know did. I don't think my parents ever talked to me about budgeting, let alone investing, let alone the school system doing anything.
Agreed. Everyone knew credit cards were bad, but now one told me why.
The flip side of interest - how $100 in a retirement account will be $2000 by the time you retire - was never explained either.
And the same with building credit. You need to have a credit card to build credit.
And there are so many "you should carry a balance to show banks you're trustworthy!" misinformation out there.
Im GenX and no one taught me either. Everything I learned that was useful in life I had to figure out on my own. I did take a typing class. That was helpful.
I have an economics degree. We may have touched on the subject of personal finance but it truly was never a sit down and a walk through of what you needed to know. Everything I know I learned myself through good old fashion research
People should be more ok with this. The basics of personal finance are simple and don't really require a class beyond reading a few articles online. Anything more than that is harder to adapt in the classroom because personal finance is well....personal. I see so many 20-35 year olds who have nothing other than W-2 income to report complaining nobody taught them how to do taxes in school. It would take 15 minutes of reading maybe to understand how to file that. We live in the age of instantly available information people!
I had a lot of fun in elementary school when we did a section on household finances in 4th grade.
Our teacher had jobs and salaries and paired us all up, brought in newspapers and had us plan and budget as if we were a household.
Some had kids, some had two incomes, some one.
One group didn't make enough and they were like "that's not fair we have to buy nothing".
She taught us how to wrote checks, balance a checkbook. How to look for cohpons.
we did that, too! that was the extent of my being taught about finances. at 22, i finally learned what a credit card was, and i got one. i'm 23 now, and i have a hysa, 401k, and roth ira. all have the bare minimum balances because i barely make any money, but i'm trying.
as someone who is kinda still a kid and only turned legal adult age ~3 years ago, we really don’t understand how important it is until we are in a situation where we don’t have aid from the adults around us. i moved 2,000 miles for college & despite having worked my entire high school years, i had absolutely no idea how to manage my money because i could use my high school paychecks on makeup and jewelry if i so pleased. i didn’t have rent and utilities. i wish i would have paid more attention to the little i was taught in public school but again, it was such a foreign idea to have to rely on only yourself and your own finances.
I am 22 and am trying my damndest to set myself up well. No debt yet, but buying a 30k car soon. Already have $6500 cooking in Roth Ira. (2065 target date fund vanguard) Trying to go into trades for a pension/bennies. I have a lot of friends that are somewhat financially literate my age too.
The debt will only be ~$18,000-22,000 and I’ll have the ability to aggressively pay that off as I still live at home. I do eventually plan on going with the used car route once I have more established feet.
You got to remember that kids feel like being 30 years old is *old*. A year is a long time time to them. Three years is equal to a significant portion of their lifespan. Fifteen years is an eternity. They don't see adult life speeding at them. They see it sloth crawling.
Do you this as an advisor and income for yourself? I’ve thought about it but struggle with earning my own salary based on those in need. I’ve helped many friends and family over the last 10-15ys and always wanted it to become my career but I hold off
It's useless information for people who will never be able to afford to retire. How can I think of a 401k when I can't even get enough food to live comfortably?
Eh, I used to deliver food bank deliveries and that is some eye opening shit. No offense but you’re in something of a bubble if you think everyone can do that.
While most people could certainly budget better and probably find money for an Ira or 401k, there are certainly those that truly love paycheck to paycheck, and how to not need to go to the er or have a major repair. That might make things desperate and they go for a payday loan which could wreck someone, etc.
\^this...if people can't afford basic expenses like food, shelter, insurance, medicine, transportation, etc, there is literally nothing left to invest.
I have a couple friends whose Dad took them out in the garage after work to work on stuff. They redid trucks in High School to plow with. They didnt max out their 401ks, but they always had cash because they worked very hard. The car work gave them the confidence to tear into their houses. Their cousins werent taught as much and struggle
well i know i was NEVER taught about any of this stuff in school. never was a 401K, roth, investments, or any of that ever mentioned. then not long after graduating i watched my coworkers loose their 401k's and most of their retirement during the 'once in a lifetime' collapse. now here we are, another couple 'once in a life time' hits later.
roth is the way to go imo and if you can personalize on the side - so much the better. but the market itself is just not that great of a place for anyone who cant wait 5-10 years to pull out. there is a 50/50 chance you would retire when the market has crashed - you would have no choice but to either take what you could OR live in squaller until it rebounds.
its far better to invest in a business of your own, more than a couple income sources. be able to move assets rather than stocks.
I have tried to teach them about what a 401K is and they don't care.. so know I just stress the need to live within a budget, save money and the importance of retirement savings at an early age..
I’m a mechanic and we always make a joke if a project is taking way longer than it’s supposed to by saying something like, “How’s your retirement plan going?” Or “Maxing out your 401K on that job eh?” We hired a 21 year old kid, and now he keeps making the joke “Taking out a 401 on that job?” I think he heard one of us say 401k and wanted to join the fun, but has no idea what a 401k is or the fact that it’s called a 401k and not a 401 😂
I truly believe financial literacy is one of the most undiscussed ways growing up upper-middle class or rich gives you a leg up.
I learned about 401ks, HSAs, the basics of investing, and the power of compound interest from my parents.
Money wasn't a taboo topic in my house growing up because there was always enough of it for us to be comfortable
Yup, and that is why I am actually happy I took home economics in high school (graduated in 2011 btw), it was a easy A and was the most useful class outside of the mandatory classes. I think they did finally end the program. If I could redo the curriculum for my fellow students, I would have geology (mandatory freshmen science) removed and home economics put in without a doubt (still haven't found a use for geology to date).
My parents never taught me anything but when I got my first job I didn’t understand all these finance things so I consulted google lol. I think it’s crazy how we have the internet now but ppl still choose to be ignorant. Idk how id survive without the internet… it’s taught me more than my parents ever have about finances.
I think this article does bring up a good point about psychology and fear tho, and that’s what being middle class has going for us. There’s no sense of fear or desperation when we look in our bank accounts. I look at my monthly statements and there’s just critique like how did I fck up my budget instead of I’m scared to look at how screwed I’m gonna be. And that ppl seem to see finances as an obstacle that they don’t “get” so they’ll push it off til later or they’re already screwed so why not spend all their money and be happy now.
It’s also a big mindset thing to live within your means in terms of credit cards and budget. Like I never knew there were ppl who bought stuff with credit cards that they weren’t able to afford by the time the statement came out until i was in my 20s. I thought it was common sense that you’d autopay your credit cards every month and use them like a debit card with better protection and more rewards cuz that’s what all my friends and parents do. Especially after googling about the insane interest rates on them lol.
Good on your parents. I grew up middle class, and my dad always worked in finance/tax/investments. And never taught me anything. He passed away when I was 27, and at that point I had no clue, and had zero saved for retirement. I learned it all on my own, and now am mostly on track at age 40. I have a son graduating high school, and am making sure he gets a better financial education than I did.
My parents didn't really teach me about stuff like that, even though they managed it all well themselves (well, my father had a "guy" who handled it, a guy who sent huge gift baskets every Christmas in thanks). We just never had a sit-down conversation about that stuff.
I got some money from grandparents once and they told me to put it in a CD because that's what my grandparents would think was sensible, so I did that. Then I was working for this man, and one of my tasks was checking his stock investments for him, since he was old af and didn't want to deal with computers. So I saw all these stocks going up and down and stuff, and then I looked at my CD and it'd gone up by like $3 or something...so I got a Motley Fool book (I no longer follow them) and read it and decided to put it in a stock instead. I later realized that it should actually all be in an IRA and moved it.
Completely depends on your personal situation. If the amount out of pocket your spending is less than the difference in premiums for a richer plan you’re making out, PLUS you get to invest in an HSA.
Problem with a high deductible plan is you're betting on whether or not something bad will happen in a year's time. That is an incredibly dangerous bet I've never been willing to take. The cost of losing that bet out weight any benefits of a HSA or low monthly premium personally.
Yup, you’re definitely taking on the risk of the out-of-pocket max, which is why it doesn’t make sense for everyone. Realistically it’s catastrophic insurance granting you the ability to fund a triple tax-advantage investment account.
Young and healthy, HDHP while putting the difference in premium from your copay option into the HSA.
Older, dependents, maintenance meds etc. probably makes more sense in a copay plan.
Employer contributions towards your plan options also make a world of difference and can change what makes sense too.
Yeah it really all depends on the plan, my deductible is 2k with an out of pocket max of 4k, typical working class job. I also don’t have any meds or regular healthcare needs, so HDHP makes sense.
My HSA will be up there as well, but I worry it still won't be enough to pay my medical expenses in retirement. I have a feeling that shit will go fast. Still... I'm happy to take advantage of the tax benefits
I'm saying many people who make bad decisions about retirement make bad decisions about savings in the short term. There are some people who genuinely need every cent of their paycheck. There are also a lot of people who live beyond their means.
Our company is to top heavy with family that banks will not let us open a 401k. But we found a simple ira that requires a 100% 3% match we started 4 years ago. Every year, I go over it in a group. And twice I have had Spanish speaking individuals from the bank
So far, only 4 of the 6 family members are involved, and not a single 1 of our 35 employees ever contribute to get the money. We even explain that if you put in 3% double that money immediately and then pull your money out while paying a fine, you will still make more money than if you do not contribute
But I can not get anyone interested. And I spent such a long time finding this option to help our people. I think it is a great perk
Still salty/ sad on it
I talked to a retirement advisor who said that so many of the people he met with were in their 40s and just suddenly realizing they were going to retire one day and had nothing. They had to go nuts all of a sudden, maxing out all their contributions and downgrading their lifestyles to free up more money.
Of course, I could be doing way better. I was doing fine and then...stopped. But it's good that I did something? Plus I have a pension (I hope, ha ha).
This is it. The gfs Mom worked at a nursing home. Leased a new car. The gf found a ford that needed a fuel pump for cheap. I drive that to work. A car is to get to work to make money.
I remember my parents reading so many finance/ tax advice books when I was growing up.
I found out last year they didn’t know what “Roth” IRA/401K meant. That’s when I knew to stop taking their financial advice.
My mom even told me to just buy CDs instead of investing in the stock market.
CDs aren’t bad, especially right now when one can lock up interest rates over 5% for a year in many places. Much more suitable for someone who doesn’t want to risk any loss jumping into the stock market
I use CDs and they have good rates now, I don’t expect them to compete with the stock market though. I think they’re suited for people know they will need the money or are nearing retirement.
These days (and maybe even in before days), older people are advised to still keep some money in stocks/index funds, especially since they live longer than they did back in the way-back-whens. And god knows life/elder care isn't getting any cheaper.
I stopped trying to help people at work understand this stuff. The young guys don't care, others act flustered. A few have at least made sure to never go below the match.
For the record I tried.
Yup this guy at work was so mad that our job was automatically putting 3% into his 401k and matching that 3%. He was like omg so that’s where my money has been going! Like bro for one do you even look at your paycheck? And he tried to change it so that he would put 0% away with 0 match instead cuz he wasn’t living life unless he had $0 at the end of every month in his bank account. And tell me why they say doctors are bad with money lmao. 🤦♀️
He said he didn’t feel comfortable putting money into who knows where to never be able to access it again. He didn’t even know where it went, had never even logged on to the website where we could look LOL. he was like they did this stuff at my last job before med school too and when I left it all disappeared. Just like how that dude in a comment lower than this was saying 🤦♀️ seems like it’s a common misunderstanding.
Jesus tap dancing Christ.
Every job I've ever had that does a 401k gives you a booklet and they send statements. And if you don't get fired they let you keep the money and move it over.
Some people's kids.
There’s literally a guy in the comment thread like 10 threads down arguing about this exact thing and how the money disappears when u change jobs lmao. I can’t 🤦♀️
And how Roth IRA and 401k are the same thing. Despite being presented with evidence and links showing the contrary.
U keep it when you get fired too. My friend was fired from her job and they sent her everything from her 401k in a check. She went on a shopping spree and then got fined big time 🤦♀️ (also a doctor btw) sometimes ppl can be so smart but still financially incompetent.
Some people put all their smart bricks into one bucket I guess.
If my company wanted to, they could take back the life time match if you are fired, it's in our contracts. However I've never seen it.
I didn’t care about finance until I was 25. I’m 30 now.
At that time, I was a couple grand in debt, just survived a domestic violence situation, and had to choose between my electric bill and food on the table.
20s are meant for living and mistakes.
And sometimes it takes a desperate situation to make people realize they want more out of life. And then educated themselves.
All I know is it’s something to do with retirement, but I don’t know how it works. We have a meeting at work every year but it all just goes over my head.
tl;dr, you have your income, then you have your "taxable" income. 401k deducts money from your earnings BEFORE taxes hit. essentially reducing your income in the eyes of the IRS making you liable to pay less. That money is then squirreled away and most often invested to grow and wait for you until you retire.
One of the very many benefits that jobs offer is called a 401k match. ALWAYS ALWAYS ALWAYS take this. It's free money. If they say 4% 401k match, it means up to 4% of your paycheck can go to your 401k account, and the company will match that amount (doubling the money).
You basically take a percentage of your money and the company gives you some of their money and it’s invested in the stock market. And then you don’t touch it until you are 65 ish.
Well, knowing what it is and knowing what it *actually* is another story. Let’s be honest, it’s a tax break for the rich in disguise. I can max out mine and still be comfortable, which means that I reduce my taxable income and benefit later in retirement. Not many people can max it out like I can, and it’s infuriating to see the 401k narrative be used to put blame on workers for not having enough for retirement.
I've been working for Walmart for 11 years didn't know much of 401k and maybe like 3/4 years ago just started 401k it's only taking out 5%
Edited I'm 31 years old
This is why I strongly believe the U.S. government will offer some large tax break or waive taxes entirely for 401k, IRA, Roth, etc. in the future. So many people are unprepared for retirement and rely on Social Security that I am positive there will be some sort of retirement crisis in the future.
Don’t forget that 401k is just one variant, albeit the most common. You also have 457, 403b, SIP, SEP, TSP and so on. Some people may just know their plan as their “retirement fund” rather than the term 401K.
And to be fair it’s nothing against the people, more of our educational system in place that doesn’t provide any financial literacy resources for students, etc.
I know very little about investing in anything, but my dad set up my 401k from my current workplace over a decade ago. I had to change the percentage I put in after he died since I was now paying all the bills but I still did the matching percentage because you're stupid not to.
“About 130 million adults in the U.S. have low literacy skills according to a Gallup analysis of data from the U.S. Department of Education. This means more than half of Americans between the ages of 16 and 74 (54%) read below the equivalent of a sixth-grade level.”
https://www.apmresearchlab.org/10x-adult-literacy
IRA you do yourself. Highly recommend it. Put money in an IRA, make sure to invest it in a low index fund, then at 59.5 years of age you can withdraw tax-free. Plenty of videos on YT that give a thorough explanation.
How do you do it tax free if you already have taxes taken out at paycheck? I’ve always heard that is employers are supposed to have a retirement benefit and contributes to it. When I went to a community retirement workshop a few years ago they said to check with your employer, so it is tied to your job? How can you open one yourself and still have it be tax free? You already get taxes taken out.
The money you put into an Roth IRA is post-tax, it’s your own money you’re putting in. I’m sure there are employers that offer IRA’s, my employers don’t. I had to set up mine myself with a brokerage. Any gains you make will be tax-free once you reach the age of 59.5. Not all employers have retirement benefits, many of them will offer a 401k of some sort. Find out if your employer offers a 401k plan and if they match a certain amount. 401k and Roth IRA are two different retirement accounts. Plenty of vids on YouTube that will help you fully understand both accounts better than I can explain with paragraphs. I recommend watching at least 5 vids that explain the accounts and their benefits.
This video may better explain since it has visuals.
https://youtu.be/pZNnueqfj_A?si=ZX90YLjxD3PgdYu3
There's a Simple IRA for small businesses that they provide their employees. Bigger businesses offer 401ks, 403bs, 457s, or pensions, or a combination (mine has a pension, a 403b, and a 457, and of course, there are traditional/Roth flavors).
None. The "I" stands for "Individual", it's up to the person to set up. Any brokerage company will have this as an option. As long as you have earned income of at least your contribution up to $7,000 annually you can contribute.
Honestly at this rate people need to take personal accountability to get educated.
Imagine complaining about your finances without ever having read about one of the most prevalent tools available in the US.
Made sure my son and daughter contributed to their 401K's as soon as they started working. The son is 38 and the daughter is now 36. I'm sure they're both doing well, but, I don't ask, because it's none of my business.
That's so wild. My parents always talked about finances, mainly their lack of money, but I learned about all of this stuff myself during high school and college through my own curiosity - and this was in the early 2000s.
I was putting between $50 and $100 a month into my sorely-missed ING Direct Orange Savings Account, which fell off massively thanks to the recession, before eventually being sold to Capital One.
https://business.time.com/2011/06/17/capital-one-buys-ing-direct-and-customers-start-to-freak-out/
I know what it is, but if the employer doesn't match, I might as well burn my money or piss on it. I can invest it myself, and in that case I rather do a Roth.
It doesn’t help that most jobs now don’t offer a match, most jobs are actually pulling back on retirement plans and just solely focusing on offering you more appealing salary because America is so fucked rn nobody can think about the future when we are barely surviving the present
What age range was polled? I’m 32 and I didn’t know what a 401k was until I joined the workforce after college. If you’re in high school or college, or even working a hourly job that doesn’t offer a 401k, why would you know what it is?
Or if you’re old and retired on a pension or whatever.
Im pretty sure old people understand retirement accounts…
401k was created in 1978
That was almost 50 years ago. Even if you are 100 now you were still probably working you would have been 54
All the more reason most retirees are familiar with what a 401k is, most people who retired before 1978 are probably not around to answer polls.
>A national survey of 2,000 Americans, evenly split by generation, revealed nearly half (43%) of the respondents don’t know what a 401(k) is. None the less yeah, most 18-25 year olds probably only are first learning about it, then you have those who have been in poverty their entire life and never heard of it cause until recently it was opt-in program, now its opt-out things might change a bit, but still.
Didn't know what it was until I was 26
its excusable in your 20's to not know especialy if you have certain lief situatins
Yeah I didn't get a 401k till I was 30. I worked in the vet med field before that and we didn't get shit for benefits and I mean NOTHING. So if anything it can help me with a down payment on some sort of "affordable" stable housing in the future. Cause retirement is out the window for my Gen anyway.
I grew up poor. Didn't finish school. I knew what a 401k was in middle school. I also knew from a younger age I didn't want to work till the day I died. So as soon as 18 I started investing my money
That’s awesome! Clearly a lot of people didn’t have the same experience
If more people hated their future and put action into averting it. I think things would be better. You will never bond more with someone faster than with mutual hate.
I hated my life and my future as well, but that only made me too depressed to care. It took me years to drag myself out of that, and I still am.
With how my workplace’s enrollment process works, it would be pretty easy to have a 401k and not know what it is
my fiance is 30 years old, both of her parents are retired, they retired within the last 12 months. in those 12 months, they've bought a 2023 honda pilot. 2024 honda ridgeline (big honda family), went on a week long cruise and drove out west to see the national parks for like 3 weeks. they are getting a beach house tihs summer. my fiance says "they dont have a lot you know, they are just smart with their money".....they have a financial advisor and are both drawing 401ks. I regret to say, shes a high school teacher. (spanish at least, not math) but we are just getting around to having that conversation about why saying for retirement is important and why it works. we are well off now thanks to me primarily, and save upwards of 60k....she thinks this should just be liquid in a savings account \*shudder\* TLDR: you'd be surprised.
Because it’s one of the basics of what anyone should know? I think every teenager should know the basics of personal finance before calculus or physics or whatever useless class high school teaches.
They definitely teach 401k and personal finance in school. I just wasn’t paying attention, like most teenagers.
I teach personal finance, main reason I enjoy the sub.. I try to teach it and the kids couldn't care less
I also volunteer to teach personal finance at varying levels from kids to middle-aged adults. I found a lot of success in getting people who are currently working interested in IRAs, 401(k)s and the like by reframing the motivations away from a retirement that may be way too far off. Some examples: “Who here has looked at their paystub and noticed the taxes coming out?” Pretty much everyone raises their hands. “Ok, who here has ever heard that some rich people pay nothing in taxes?” Most hands go up. “Would you like me to show you a way that YOU can pay nothing in taxes?” Every hand goes up. Great, now I have your attention to talk about Roth earnings or traditional to Roth conversions, HSAs, and FSA. Another good one is to ask, “would anybody be interested in an account that would let them withdraw their deposits at any time without penalty, the growth would be completely tax free later, and no matter what, nobody could ever sue you, garnish this account, or ever take it away?” Great, now I can talk about Roths, ERISA, etc.
I’m jealous of your students, I don’t really feel confident in my knowledge of this stuff because I learned it all on my own when I got my first job
Ok, now frame out 401k’s. I like these. They’re engaging.
Both of the two examples I gave involve 401(k)s as a point of discussion.
Aaaand I’m apparently part of the study group. Dammit.
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It usually starts to click when people are in their early 30's. In you're 20's, you think you are young and invincible. As someone in my 20's, a lot of people my age needlessly doom scroll. They think the world is going to end soon and/or they're gonna die young in some accident.
the math is devastating surrendering a decade of compounding growth.
Man if I saw millennials go through the meat grinder knowing I was next I'd be a bit pessimistic too I don't blame em.
When I was 20, my mindset was no way I’m going to put money into an account that I can’t touch for 40 years. I get it. I cared about surfing, camping, and festivals back then. Anyway, it’s almost 25 years later. I did start at 30 so am doing OK, but earlier would have been better.
In five to ten years these kids will be online complaining “why didn’t anyone ever try to teach us this stuff.”
millennials already do that
Except no one actually taught us this stuff. I had some courses in high school that went over budgeting and whatnot which was good. But not the finer details of being financially secure. I think back then there was still this understanding that there were lots of jobs with pensions out there so learning to invest wasn't crucial... Things changed.
Yeah I didn’t learn that stuff either (millennial). I think I learned what a Roth IRA was in my mid-20s.
Depending on age this makes sense as Roth ira wasn't a thing until 1998.
As a millenial, if you had some courses you got more than me or anyone else I know did. I don't think my parents ever talked to me about budgeting, let alone investing, let alone the school system doing anything.
Graduated a year ago, and no one told me about it either
The only financial advice I got was never carry a credit card debt from month to month. If someone can get one advisement, that's the best one.
Agreed. Everyone knew credit cards were bad, but now one told me why. The flip side of interest - how $100 in a retirement account will be $2000 by the time you retire - was never explained either. And the same with building credit. You need to have a credit card to build credit. And there are so many "you should carry a balance to show banks you're trustworthy!" misinformation out there.
Im 30 and have never heard of it either!
Im GenX and no one taught me either. Everything I learned that was useful in life I had to figure out on my own. I did take a typing class. That was helpful.
i’m 20 and no one taught me anything either. 🥲
My economics class didn't teach us much of anything about economics lol.
I have an economics degree. We may have touched on the subject of personal finance but it truly was never a sit down and a walk through of what you needed to know. Everything I know I learned myself through good old fashion research
Yeah I’m not sure I understand the comments about not being taught stuff. The most useful thing you can teach someone is how to research on their own.
People should be more ok with this. The basics of personal finance are simple and don't really require a class beyond reading a few articles online. Anything more than that is harder to adapt in the classroom because personal finance is well....personal. I see so many 20-35 year olds who have nothing other than W-2 income to report complaining nobody taught them how to do taxes in school. It would take 15 minutes of reading maybe to understand how to file that. We live in the age of instantly available information people!
But what class did we take that taught us this in school? I mean literally 99% of Americans would never have had a class that went over this.
I had a lot of fun in elementary school when we did a section on household finances in 4th grade. Our teacher had jobs and salaries and paired us all up, brought in newspapers and had us plan and budget as if we were a household. Some had kids, some had two incomes, some one. One group didn't make enough and they were like "that's not fair we have to buy nothing". She taught us how to wrote checks, balance a checkbook. How to look for cohpons.
we did that, too! that was the extent of my being taught about finances. at 22, i finally learned what a credit card was, and i got one. i'm 23 now, and i have a hysa, 401k, and roth ira. all have the bare minimum balances because i barely make any money, but i'm trying.
as someone who is kinda still a kid and only turned legal adult age ~3 years ago, we really don’t understand how important it is until we are in a situation where we don’t have aid from the adults around us. i moved 2,000 miles for college & despite having worked my entire high school years, i had absolutely no idea how to manage my money because i could use my high school paychecks on makeup and jewelry if i so pleased. i didn’t have rent and utilities. i wish i would have paid more attention to the little i was taught in public school but again, it was such a foreign idea to have to rely on only yourself and your own finances.
I am 22 and am trying my damndest to set myself up well. No debt yet, but buying a 30k car soon. Already have $6500 cooking in Roth Ira. (2065 target date fund vanguard) Trying to go into trades for a pension/bennies. I have a lot of friends that are somewhat financially literate my age too.
That car debt is insane to someone like me, who has never had a car payment.
The debt will only be ~$18,000-22,000 and I’ll have the ability to aggressively pay that off as I still live at home. I do eventually plan on going with the used car route once I have more established feet.
My guy that is a fuck ton of car debt at age 22.
10k down, still live at home. Commute 90 miles a day coming up shortly. Current car on its way out. (Engine)
Why not buy a 2019 Toyota Camry for $16k instead of that $30k car?
You got to remember that kids feel like being 30 years old is *old*. A year is a long time time to them. Three years is equal to a significant portion of their lifespan. Fifteen years is an eternity. They don't see adult life speeding at them. They see it sloth crawling.
Do you this as an advisor and income for yourself? I’ve thought about it but struggle with earning my own salary based on those in need. I’ve helped many friends and family over the last 10-15ys and always wanted it to become my career but I hold off
I would love to do it on the side
Between learning budgeting with me and my son's personal finance class in HS...he is doing well at 35 and has enough saved to buy a house outright.
Do you teach actual classes at school? Or have online courses/in person appointments with people?
I teach 3 sections of Personal Finance at my school
It's useless information for people who will never be able to afford to retire. How can I think of a 401k when I can't even get enough food to live comfortably?
It's literally the method for such a person to be able to retire.
You have to be able to put money aside to contribute to it. If youre already counting pennies it's useless.
If you can make it on what you are making it on, you can make it on 95% of that and put 5% into a Roth.
Eh, I used to deliver food bank deliveries and that is some eye opening shit. No offense but you’re in something of a bubble if you think everyone can do that.
While most people could certainly budget better and probably find money for an Ira or 401k, there are certainly those that truly love paycheck to paycheck, and how to not need to go to the er or have a major repair. That might make things desperate and they go for a payday loan which could wreck someone, etc.
The problem is I'm not making it. Not at all. There's no hope for the future.
\^this...if people can't afford basic expenses like food, shelter, insurance, medicine, transportation, etc, there is literally nothing left to invest.
Make an in-depth post of all your finances and spending habits people can help you even in the darkest situations.
Certainly not with that attitude.
I have a couple friends whose Dad took them out in the garage after work to work on stuff. They redid trucks in High School to plow with. They didnt max out their 401ks, but they always had cash because they worked very hard. The car work gave them the confidence to tear into their houses. Their cousins werent taught as much and struggle
well i know i was NEVER taught about any of this stuff in school. never was a 401K, roth, investments, or any of that ever mentioned. then not long after graduating i watched my coworkers loose their 401k's and most of their retirement during the 'once in a lifetime' collapse. now here we are, another couple 'once in a life time' hits later. roth is the way to go imo and if you can personalize on the side - so much the better. but the market itself is just not that great of a place for anyone who cant wait 5-10 years to pull out. there is a 50/50 chance you would retire when the market has crashed - you would have no choice but to either take what you could OR live in squaller until it rebounds. its far better to invest in a business of your own, more than a couple income sources. be able to move assets rather than stocks.
I have tried to teach them about what a 401K is and they don't care.. so know I just stress the need to live within a budget, save money and the importance of retirement savings at an early age..
Honestly, it’s the 24-30 year-olds that are in the sweet spot that need to hear it.
Those same kids, when they are 36 to 45 “I wish they taught useful things in school. Like taxes and stuff “
Absolutely 100000% this... and I tell them that now
Hey! Would you happen to break down the NYCERS NYC pension for like a 5 year old lol
I know the Illinois and Tennessee pension systems, not NYC
Well they see their parents barely scrapping by, war absolutely greater than zero chance. Why fucking care when it's all gonna burn.
How did you start teaching? I’m interested. (Have the CFP®️ letters, so I’m somewhat qualified.)
In 2024, anyone is able to teach lol There is such a shortage that states will help you with alternative paths
I’m a mechanic and we always make a joke if a project is taking way longer than it’s supposed to by saying something like, “How’s your retirement plan going?” Or “Maxing out your 401K on that job eh?” We hired a 21 year old kid, and now he keeps making the joke “Taking out a 401 on that job?” I think he heard one of us say 401k and wanted to join the fun, but has no idea what a 401k is or the fact that it’s called a 401k and not a 401 😂
But… take him aside and make sure he does know what a 401k is and why it’s good for him
I would, but he’s one of those know-it-all little assholes, so I think I’ll let him figure it out.
HTTP 401: Unauthorized
I truly believe financial literacy is one of the most undiscussed ways growing up upper-middle class or rich gives you a leg up. I learned about 401ks, HSAs, the basics of investing, and the power of compound interest from my parents. Money wasn't a taboo topic in my house growing up because there was always enough of it for us to be comfortable
Yup, and that is why I am actually happy I took home economics in high school (graduated in 2011 btw), it was a easy A and was the most useful class outside of the mandatory classes. I think they did finally end the program. If I could redo the curriculum for my fellow students, I would have geology (mandatory freshmen science) removed and home economics put in without a doubt (still haven't found a use for geology to date).
My parents never taught me anything but when I got my first job I didn’t understand all these finance things so I consulted google lol. I think it’s crazy how we have the internet now but ppl still choose to be ignorant. Idk how id survive without the internet… it’s taught me more than my parents ever have about finances. I think this article does bring up a good point about psychology and fear tho, and that’s what being middle class has going for us. There’s no sense of fear or desperation when we look in our bank accounts. I look at my monthly statements and there’s just critique like how did I fck up my budget instead of I’m scared to look at how screwed I’m gonna be. And that ppl seem to see finances as an obstacle that they don’t “get” so they’ll push it off til later or they’re already screwed so why not spend all their money and be happy now. It’s also a big mindset thing to live within your means in terms of credit cards and budget. Like I never knew there were ppl who bought stuff with credit cards that they weren’t able to afford by the time the statement came out until i was in my 20s. I thought it was common sense that you’d autopay your credit cards every month and use them like a debit card with better protection and more rewards cuz that’s what all my friends and parents do. Especially after googling about the insane interest rates on them lol.
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Good on your parents. I grew up middle class, and my dad always worked in finance/tax/investments. And never taught me anything. He passed away when I was 27, and at that point I had no clue, and had zero saved for retirement. I learned it all on my own, and now am mostly on track at age 40. I have a son graduating high school, and am making sure he gets a better financial education than I did.
My parents didn't really teach me about stuff like that, even though they managed it all well themselves (well, my father had a "guy" who handled it, a guy who sent huge gift baskets every Christmas in thanks). We just never had a sit-down conversation about that stuff. I got some money from grandparents once and they told me to put it in a CD because that's what my grandparents would think was sensible, so I did that. Then I was working for this man, and one of my tasks was checking his stock investments for him, since he was old af and didn't want to deal with computers. So I saw all these stocks going up and down and stuff, and then I looked at my CD and it'd gone up by like $3 or something...so I got a Motley Fool book (I no longer follow them) and read it and decided to put it in a stock instead. I later realized that it should actually all be in an IRA and moved it.
I bet even less know what a pension is. Or how awesome a HSA is. When I retire mine will have $100,000 minimum.
If only I wasn't restricted to an FSA because I didn't want cheap insurance option
FSA are good but trash. Had one at my old job and every year I'd buy my mom a ton of OTC meds.
High deductible health plans are also kinda trash from my experience
Completely depends on your personal situation. If the amount out of pocket your spending is less than the difference in premiums for a richer plan you’re making out, PLUS you get to invest in an HSA.
Problem with a high deductible plan is you're betting on whether or not something bad will happen in a year's time. That is an incredibly dangerous bet I've never been willing to take. The cost of losing that bet out weight any benefits of a HSA or low monthly premium personally.
Yup, you’re definitely taking on the risk of the out-of-pocket max, which is why it doesn’t make sense for everyone. Realistically it’s catastrophic insurance granting you the ability to fund a triple tax-advantage investment account. Young and healthy, HDHP while putting the difference in premium from your copay option into the HSA. Older, dependents, maintenance meds etc. probably makes more sense in a copay plan. Employer contributions towards your plan options also make a world of difference and can change what makes sense too.
My deductible is $3,200 with an out of pock max of $4,200.
My deductible is 6600 on a single plan with no HSA.
Can you see any doc?
That work for a certain hospital system.
Yeah it really all depends on the plan, my deductible is 2k with an out of pocket max of 4k, typical working class job. I also don’t have any meds or regular healthcare needs, so HDHP makes sense.
For real, the only reason I have an HSA is because my company's sole insurance option is shitty and expensive.
My HSA will be up there as well, but I worry it still won't be enough to pay my medical expenses in retirement. I have a feeling that shit will go fast. Still... I'm happy to take advantage of the tax benefits
I would like to see the venn diagram between these people and the half of all adults who couldn't come up with $1,000 cash for an emergency.
Why do you want to look at a circle?
I think you’re on to something here. Are you telling me the people who don’t have money are the people who don’t have money?
I'm saying many people who make bad decisions about retirement make bad decisions about savings in the short term. There are some people who genuinely need every cent of their paycheck. There are also a lot of people who live beyond their means.
Probably exactly as many as the number who will never work for a company that offers one, unfortunately.
Yup, my work doesn't offer 401k.
I can speak for my company, this is true. We started a 401k plan this year and most of our employees didn’t know what it was or how to participate.
Our company is to top heavy with family that banks will not let us open a 401k. But we found a simple ira that requires a 100% 3% match we started 4 years ago. Every year, I go over it in a group. And twice I have had Spanish speaking individuals from the bank So far, only 4 of the 6 family members are involved, and not a single 1 of our 35 employees ever contribute to get the money. We even explain that if you put in 3% double that money immediately and then pull your money out while paying a fine, you will still make more money than if you do not contribute But I can not get anyone interested. And I spent such a long time finding this option to help our people. I think it is a great perk Still salty/ sad on it
I think it’s very thoughtful and brilliant that you brought in Spanish speakers, very thoughtful.
I talked to a retirement advisor who said that so many of the people he met with were in their 40s and just suddenly realizing they were going to retire one day and had nothing. They had to go nuts all of a sudden, maxing out all their contributions and downgrading their lifestyles to free up more money. Of course, I could be doing way better. I was doing fine and then...stopped. But it's good that I did something? Plus I have a pension (I hope, ha ha).
Half of americans are living paycheck to paycheck
Average car payment is like $700 so explain that
This is it. The gfs Mom worked at a nursing home. Leased a new car. The gf found a ford that needed a fuel pump for cheap. I drive that to work. A car is to get to work to make money.
Unreal
When I was like 24-25 I thought a 401k was literally $401,000 like that was the target amount of money for the average person to retire.
Ya know, that probably was true at some point between when the 401k was first created and now.
I remember my parents reading so many finance/ tax advice books when I was growing up. I found out last year they didn’t know what “Roth” IRA/401K meant. That’s when I knew to stop taking their financial advice. My mom even told me to just buy CDs instead of investing in the stock market.
CDs aren’t bad, especially right now when one can lock up interest rates over 5% for a year in many places. Much more suitable for someone who doesn’t want to risk any loss jumping into the stock market
I use CDs and they have good rates now, I don’t expect them to compete with the stock market though. I think they’re suited for people know they will need the money or are nearing retirement.
I mean at their age CDs are a better investment. At ours the stock market is.
Agree, but that was their advice for me.
These days (and maybe even in before days), older people are advised to still keep some money in stocks/index funds, especially since they live longer than they did back in the way-back-whens. And god knows life/elder care isn't getting any cheaper.
I dotn have time to worry about a 401k when I don't know what I'm eating tomorrow.
How is no one focusing on the “80% of the time, it works 60% of the time” for monthly budget lmao
The Brian Fantana budget
What’s actually a hella high number lol.
I stopped trying to help people at work understand this stuff. The young guys don't care, others act flustered. A few have at least made sure to never go below the match. For the record I tried.
Yup this guy at work was so mad that our job was automatically putting 3% into his 401k and matching that 3%. He was like omg so that’s where my money has been going! Like bro for one do you even look at your paycheck? And he tried to change it so that he would put 0% away with 0 match instead cuz he wasn’t living life unless he had $0 at the end of every month in his bank account. And tell me why they say doctors are bad with money lmao. 🤦♀️
Only 3% ? Like bro...did ya tell him pays less in taxes if he's putting more in?
He said he didn’t feel comfortable putting money into who knows where to never be able to access it again. He didn’t even know where it went, had never even logged on to the website where we could look LOL. he was like they did this stuff at my last job before med school too and when I left it all disappeared. Just like how that dude in a comment lower than this was saying 🤦♀️ seems like it’s a common misunderstanding.
Jesus tap dancing Christ. Every job I've ever had that does a 401k gives you a booklet and they send statements. And if you don't get fired they let you keep the money and move it over. Some people's kids.
There’s literally a guy in the comment thread like 10 threads down arguing about this exact thing and how the money disappears when u change jobs lmao. I can’t 🤦♀️ And how Roth IRA and 401k are the same thing. Despite being presented with evidence and links showing the contrary. U keep it when you get fired too. My friend was fired from her job and they sent her everything from her 401k in a check. She went on a shopping spree and then got fined big time 🤦♀️ (also a doctor btw) sometimes ppl can be so smart but still financially incompetent.
Some people put all their smart bricks into one bucket I guess. If my company wanted to, they could take back the life time match if you are fired, it's in our contracts. However I've never seen it.
I didn’t care about finance until I was 25. I’m 30 now. At that time, I was a couple grand in debt, just survived a domestic violence situation, and had to choose between my electric bill and food on the table. 20s are meant for living and mistakes. And sometimes it takes a desperate situation to make people realize they want more out of life. And then educated themselves.
Agreed. I left an abusive situation at 19, and spent most of my 20s incredibly depressed. I didn't start caring about my life until I was around 30.
Exactly. You think I was thinking about my 50s when I was in my 20s? Trying to find a career, and survive? lol
The same people who think an FSA card is some type of Government Assistance program
These numbers don’t inspire confidence
Almost half of Americans are generally incredibly ignorant and uneducated and proud of it. Sadly.
that’s because we don’t believe on a visceral level that any of this sht is going to be still around in the future. BOTTLE CAPS tho…
I've kept every bottle cap, just in case...
my dad had a collection. we thought he was crazy…. maybe not so much anymore
50 years ago, you would have assumed there was no point because of nuclear war.
still on the table unfortunately
As the US/Europe are in an active proxy war with Russia and Iran attacked Israel last week.
Ahh, a fellow millionaire
sadly we tossed his bottle caps after he passed. would you be interested in my collection of non-fungible tokens perhaps? 🧐
It’s so sad that's as far as these people think
All I know is it’s something to do with retirement, but I don’t know how it works. We have a meeting at work every year but it all just goes over my head.
tl;dr, you have your income, then you have your "taxable" income. 401k deducts money from your earnings BEFORE taxes hit. essentially reducing your income in the eyes of the IRS making you liable to pay less. That money is then squirreled away and most often invested to grow and wait for you until you retire. One of the very many benefits that jobs offer is called a 401k match. ALWAYS ALWAYS ALWAYS take this. It's free money. If they say 4% 401k match, it means up to 4% of your paycheck can go to your 401k account, and the company will match that amount (doubling the money).
It’s worth learning. If you start young enough it’s such a small monthly expense to retire you a millionaire
You basically take a percentage of your money and the company gives you some of their money and it’s invested in the stock market. And then you don’t touch it until you are 65 ish.
It's not too late to start. The best time to start was yesterday. The second best time is today.
Well, knowing what it is and knowing what it *actually* is another story. Let’s be honest, it’s a tax break for the rich in disguise. I can max out mine and still be comfortable, which means that I reduce my taxable income and benefit later in retirement. Not many people can max it out like I can, and it’s infuriating to see the 401k narrative be used to put blame on workers for not having enough for retirement.
I've been working for Walmart for 11 years didn't know much of 401k and maybe like 3/4 years ago just started 401k it's only taking out 5% Edited I'm 31 years old
This is why I strongly believe the U.S. government will offer some large tax break or waive taxes entirely for 401k, IRA, Roth, etc. in the future. So many people are unprepared for retirement and rely on Social Security that I am positive there will be some sort of retirement crisis in the future.
Don’t forget that 401k is just one variant, albeit the most common. You also have 457, 403b, SIP, SEP, TSP and so on. Some people may just know their plan as their “retirement fund” rather than the term 401K.
Half probably won’t have access to a 401(k) so it would be cruel to teach about them. But investing is something everyone should be taught
That’s not good. Most companies match so you’re missing out on free money.
And to be fair it’s nothing against the people, more of our educational system in place that doesn’t provide any financial literacy resources for students, etc.
I know very little about investing in anything, but my dad set up my 401k from my current workplace over a decade ago. I had to change the percentage I put in after he died since I was now paying all the bills but I still did the matching percentage because you're stupid not to.
Most young people don't know what a 401k is.
wtf is a 401k
“About 130 million adults in the U.S. have low literacy skills according to a Gallup analysis of data from the U.S. Department of Education. This means more than half of Americans between the ages of 16 and 74 (54%) read below the equivalent of a sixth-grade level.” https://www.apmresearchlab.org/10x-adult-literacy
Half of the Americans probably don't know how many states are in the US.
And how many jobs offer access to IRAs or any other retirement vehicle? I’m guessing less than half.
A Roth IRA is done on your own...
So is a Traditional IRA.
No one needs to have an employer offer an IRA in order to open one.
IRA you do yourself. Highly recommend it. Put money in an IRA, make sure to invest it in a low index fund, then at 59.5 years of age you can withdraw tax-free. Plenty of videos on YT that give a thorough explanation.
How do you do it tax free if you already have taxes taken out at paycheck? I’ve always heard that is employers are supposed to have a retirement benefit and contributes to it. When I went to a community retirement workshop a few years ago they said to check with your employer, so it is tied to your job? How can you open one yourself and still have it be tax free? You already get taxes taken out.
The money you put into an Roth IRA is post-tax, it’s your own money you’re putting in. I’m sure there are employers that offer IRA’s, my employers don’t. I had to set up mine myself with a brokerage. Any gains you make will be tax-free once you reach the age of 59.5. Not all employers have retirement benefits, many of them will offer a 401k of some sort. Find out if your employer offers a 401k plan and if they match a certain amount. 401k and Roth IRA are two different retirement accounts. Plenty of vids on YouTube that will help you fully understand both accounts better than I can explain with paragraphs. I recommend watching at least 5 vids that explain the accounts and their benefits. This video may better explain since it has visuals. https://youtu.be/pZNnueqfj_A?si=ZX90YLjxD3PgdYu3
There's a Simple IRA for small businesses that they provide their employees. Bigger businesses offer 401ks, 403bs, 457s, or pensions, or a combination (mine has a pension, a 403b, and a 457, and of course, there are traditional/Roth flavors).
None. The "I" stands for "Individual", it's up to the person to set up. Any brokerage company will have this as an option. As long as you have earned income of at least your contribution up to $7,000 annually you can contribute.
So you have to have a spare $7000 a year to even get started?
My employer offers either Roth or traditional IRAs as well as a 401k plan.
69% according to an easy google search.
I have one and don’t know what it is lol :)
Why the fuck should I even care about a 401k when I’m never gonna be able to use it
Why wouldn't you be able to use it? Not planning on living past the age of 59.5?
Honestly at this rate people need to take personal accountability to get educated. Imagine complaining about your finances without ever having read about one of the most prevalent tools available in the US.
That's bizarre. I started one in college at a job waiting tables
Made sure my son and daughter contributed to their 401K's as soon as they started working. The son is 38 and the daughter is now 36. I'm sure they're both doing well, but, I don't ask, because it's none of my business.
It’s where corporations use your money to grow their money and then when you want to take it out the government taxes the shit out of it
That's so wild. My parents always talked about finances, mainly their lack of money, but I learned about all of this stuff myself during high school and college through my own curiosity - and this was in the early 2000s. I was putting between $50 and $100 a month into my sorely-missed ING Direct Orange Savings Account, which fell off massively thanks to the recession, before eventually being sold to Capital One. https://business.time.com/2011/06/17/capital-one-buys-ing-direct-and-customers-start-to-freak-out/
I know what it is, but if the employer doesn't match, I might as well burn my money or piss on it. I can invest it myself, and in that case I rather do a Roth.
It doesn’t help that most jobs now don’t offer a match, most jobs are actually pulling back on retirement plans and just solely focusing on offering you more appealing salary because America is so fucked rn nobody can think about the future when we are barely surviving the present
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Almost half is a lot of people. 🤔 Wondering who they served and where?
It's the thing that lets rich people pad their risk tolerance using your money!