As the median age for retirement increases and social security benefits decrease, saving for retirement becomes that much more important, even when you’re in college.
The Marriott School of Management at BYU has put together a website that will help students, and any other interested party, prepare to save, even at an early age. Benefits of saving at an early age, for instance as soon as students get out of college, are many, according to a Deseret News story.
Bryan Sudweeks, who teaches business classes, said the Marriott School is concerned that people are not being wise with their money, so it created this website.
“It’s kind of unique,” Sudweeks said. “This is actually one of the few websites the Church links to from its provident living website.”
The site includes full tapings of the Business Management 418 class about personal finance as well as textbooks and finance manuals.
While college students can’t be expected to start saving during their schooling, they can be planning ahead. Sudweeks estimated that only about one to five percent of BYU students are saving for retirement. But that’s OK, he said.
“The key is to get the education you need and then start saving,” Sudweeks said. “Right now, everything you’re making is just (for you) trying to survive. But you should try to be minimizing your expenses.”
Planning for forty years down the road may seem silly, but the 2012 Retirement Confidence Survey showed that the baby boomers who didn’t plan ahead are now finding they cannot live as comfortably as they did before. Sixty percent of baby boomers have less than $25,000 saved for their retirement. A reported 56 percent said they had never tried to calculate how much money they would need to save by the time they retire so they can live comfortably.
“And so a lot of people … just haven’t put in the time,” Sudweeks said. “They haven’t thought through it, what it means, and some people are scared to do it because they think that it means they’re not going to be able to get the new car every year or things like that, but you’re either going to spend it now or spend it in retirement.”
Sudweeks said he recommends his students save 20 percent of every dollar they make once they graduate from college in order to save, not only for retirement but for missions, children’s education, etc.
Sudweeks also said in order for this money to be saved effectively, students need to understand investment instruments, especially tax advantage retirement vehicles like 401(k)s and IRAs.
Nils Peterson, a senior studying business, said although he isn’t saving for retirement now, he will as soon as he graduates and starts working full time.
Peterson said he’s saving “just because I don’t want to be in a tough spot later on when I’m older and working when I’m too old.”
However, not all students think along these lines. Andrew Worth, a senior studying business, said classes for his major helped him understand the importance of saving early.
“I wouldn’t think about saving for retirement if I hadn’t taken Finance 301,” Worth said, “because I don’t think it’s well taught in our culture. Because I’ve taken certain finance classes, I’m thinking … once you graduate you need to start saving for retirement, … but I don’t know if other students take similar classes and professors give that kind of advice.”
