Money, Credit, and Retirement

Modified: 2025-11-11 12:53 PM CST

It is never too early to think about handling money, establishing credit, and planning for retirement.
- At this point in your lives, money is probably scarce but after you graduate and get a job you must know how to deal with it.
The same is true for establishing credit. That will help in buying a vehicle and, later, a house.
While retirement may seem far off the time to that point will pass more quickly than you might imagine.

Preparing for retirement early will pay enormous dividends when that time comes.

Money

Salary
- Negotiation
  - Do your research (What do similar jobs pay? Is the offer a lowball? What kind of organization, public or private?)
  - A simple negotiation technique (Demo)
  - O*Net Online
    - Good site to find salary information
- Career Paths
  - Academic: Assistant Professor, Associate Professor, Full Professor, Administrator?
  - Professional: Private Practice or Institutional
    - Hang a shingle
      - In other words, start a business yourself
    - Work for someone or a company
      - In other words, earn a salary
  - Business: Institutional or Entrepreneurial
    - Work for established firm
      - What size company? Large, medium, or small?
      - Regular hours
      - Might require working onsite (office, factory)
    - Work for a start up
      - Work for a new company.
      - Might require irregular hours
      - Have you heard of 996? (9am to 9pm, six days/week)
  - Office or Work from Home?
    - During and after Covid remote work became more popular.
    - Today, many companies are requiring workers to return to onsite settings

Axios notes that remote jobs are becoming less available
- There are fewer remote jobs today
- Predicts a new normal
  - More and more companies want workers back onsite

New Job?

When to Switch Jobs?
- US News (see below) suggests:
  - after 10 years in same job
  - when you are really good at your job
  - when you are not good at your job
  - when you do not like your colleagues
  - after a big success on your part
  - at the fiscal year (July 1 to June 30 at SAU; October 1 to September 30 at Federal Govenment)
  - after a vacation
  - when your goals conflict
  - when you are misused
  - when you are happy
  - Always keep up your resume!
Promotion and Advancement
- Promotions usually change work and job title
- Promotions usually signal advancement
- Research how promotions work in your job
  - Apply for them?
  - Role of time
  - Fast track
- Advancements
  - May not be promotions (e.g., no increase in salary, for instance)
  - Moving to better shift might be advancement
Relocation
- Will you work in the same place or will you need to move to other sites?
  - Relocation help
    - State Farm Relocation page
    - Prices vary by geographical location within the USA
    - Below, recent gas prices in San Diego, CA
Mentoring vs. Sponsorship
- Mentors
  - Mentors provide aid for newer or younger employees (teaching them the ropes)
- Sponsors
  - Sponsors advocate for their proteges to others in organization
- Gender Differences
  - Harvard Business Review: "women tend to be over-mentored and under-sponsored"

Retirement

When to Retire
- Retirees and Non-retirees (Gallup)

I get asked the retirement question often (I was born in 1949)
- Right now my answer is "I don't know."
Rules of Thumb

Save 15% per year (starting at the beginning!)
Base your investment portfolio on your age
- More in Stock Market when you are younger
- More in Bonds as you near retirement
4% Rule
- To make savings last 30 years
- Withdraw 4% first year of retirement
- Withdraw that plus annual rate of inflation from then on
- 80% chance retirement money will last 30 years

Why begin early?
- Compound Interest Example ($200/month or $2400/year) beginning at ages shown:

Earning Rate	Age 20	Age 30	Age 40	Age 50
2%	$174,931	$121,510	$77,764	$41,943
6%	$551,199	$284,942	$138,599	$58,164
8%	$1,054,908	$458,776	$190,205	$69,208

Types of Retirement Plans

Research Employer Plans
- SAU's Plans
  - Arkansas Teacher Retirement System
  - TIAA/CREF (but handled by Mustard Seed)
- Portfolio
  - Basic: Stocks and Bonds
  - Other: Real Estate, Foreign Investment, Green Companies, Conservative, Speculative

Tax Deferred Money
- Pay tax when money is taken from portfolio (e.g., during retirement when tax burden may be less)

Social Security
- Must earn 40 quarters (e.g., 10 years) with minimum income of $1,200/quarter
- PIA or Primary Insurance Amount
- Retirement Age and Benefit (reduced if taken before Full Retirement Age)
- Must take by age 70
- Spousal Benefits to those married 10 years or more (do not affect your own benefit)
- At current level of funding system will work until 2033
- Full Retirement Age
  - Born after 1960: 67 years old
- Privatize Social Security?
Three-legged Stool of Retirement
- Social Security
- Pension
- Individual Savings (IRAs or Savings Accounts)

Credit

Establishing Credit
- FICO Score
  - Payment History (35%)
  - Amounts Owed (30%)
  - Length of Credit History (15%)
  - New Credit (10%)
  - Type of Credit in Use (10%)
- Credit Scores
  - - A score of 720 or higher is generally considered excellent credit.
    - A score between 690 and 719 is considered good credit.
    - Scores between 630 and 689 are fair credit.
    - And scores of 629 or below are poor credit.
- First Steps
  - Get a:
    - Bank Account
    - Job
    - Residence History
    - Utilities in Your Name
Pitfalls
- Beware of Hype (What is APR?, Fees?, Why will you need credit card?)
- Read the Fine Print
- Make more than the minimum payment
- Don't take cash advances
- Always review your statements (look for things you did not buy)
- Don't max out your cards
- Pay on time
- Don't chase points or travel miles

Useful Links

The 10 Best Times to Switch Jobs (US News)
- http://money.usnews.com/money/careers/slideshows/the-10-best-times-to-switch-jobs
Why men still get more promotions than women (Harvard Business Review)
- https://hbr.org/2010/09/why-men-still-get-more-promotions-than-women/
FICO Score
- http://financialplan.about.com/od/creditdebtmanagement/a/creditscore.htm
Credit Pitfalls (US News)
- http://money.usnews.com/money/personal-finance/articles/2013/11/19/8-potential-pitfalls-of-credit-cards
United States Social Security Administration
- http://www.ssa.gov
Privatizing Social Security
- http://socialsecurity.procon.org/#background

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