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All right. Good afternoon, everyone. My name is Lori and we are recording today's session and obviously we're gonna be talking about negotiating your salary and also how to maximize your 4o1k. So I am joined once again, this is our last in the series of the graduation boot camp series. So I'm so happy to have Eric Jones with Student Money Management. So Eric, go ahead and introduce yourself real quick. Hey, Erica, I'm like Laurie said and Director of Student Money Management Center. What we do here is financial literacy and financial planning for you and your individual goals. We are available to you just like career services after you graduate. So if you do have questions about 41k or anything else about your finances after you graduate, please reach out.

Yeah. Today, I think is one of the most important things when it comes to the job search is how do we make sure we have enough money to pay for all the things we want to do. And we want to make sure that we're exploring careers that have the salaries that we're looking for and thinking about the kind of lifestyle that we're looking for in part of that comes with negotiating your salary. These two topics really go hand in hand because part of your benefits with an employer you want to check out, do they have some kind of retirement savings? Because you want to make sure that you will have a nice nest egg after you retire so that you can afford whether it's to travel or if it's even just be able to afford your health care costs, whatever it may be. And so I'm going to kick off our session today with our first poll question. I'm just wondering, for those of you that have joined us today, which thank you by the way, for joining us. Have any of you ever tried to negotiate your salary? And if you want, you can even put in the chat. If that went well. They didn't really want to negotiate. If you wanted to share any of that information. So I will go ahead and end the poll there.

Fantastic. So it looks like quite a few, I have not negotiated your salary and that's understandable a lot of times with our entry-level positions when we're just trying to pair our way through college. We don't always necessarily try to negotiate the salary. Sometimes there is no negotiation. The salary is the salary and we'll talk about that in a moment too. But for those of you that have negotiated your salary, if you want to put in the chat how that went? Did it go well, were you able to get a higher salary than what was originally offered? Tanya, which I forgot, I apologize. Tangent is our fabulous co-host today, so she is going to be monitoring the chat. She's our career specialists on the Gainesville campus. So Tania, is there anything in the chat about how that salary negotiation when I tell not see anything in the chat right now. Okay. No problem. No problem. Yes. Excellent. So let's get right into all the really good stuff. So when it comes to negotiating your salary, we also need to think about how much do you even need to make? What is your standard of living?

And that's where I oftentimes will refer students to the Student Money Management Center because a lot of times we just don't even need know what we need to make in terms of what does it cost for our rent? What are the utility is going to be last week in our graduation C bootcamp series we were talking about, well, if you're gonna be moving out of your parent's home, or maybe you're leaving roommates and now you're gonna be living on your own. Then how does that impact your finances? And some of that we need to start thinking about, well, what is an apartment going to cost all my own? Do I need to buy a car? Am I going to be using public transportation and my relocating?

Do I all of a sudden they'll want to pet. Do I need a want a cat, a dog? What is that lifestyle that you want? And that's where I think student money management really comes into play because they can work with you in terms of developing a budget, looking at what do things cost, and then thinking about what kind of salary does that need to be? And last week as well, we talked about some of these cost of living calculators where you can look at, okay, if you earn a certain salary and you're gonna be going to another location, what kind of salary do you need to make?

And this is just one of the many. You can always just do any kind of search for cost of living calculator and kinda get a rough idea of how far that salary would go in a different location. And different location could even be moving from the Gainesville campus down to Atlanta, moving from Salonica campus down to Johns Creek. Those are two different cost of living areas, even though they're just down the road from each other. And so that can really impact. What kind of lifestyle you have. Then also thinking about right now, if you go out often, do you want to continue that? Do you want to continue going out to eat? Do you go to the movies? Are you planning for vacations? And so all of these things really come into play when you're thinking about what is my salary and what do I need to make? When it comes to the actual negotiation?

We do want this to be where it is a win between you and your potential employer. It's not where you try to say, oh, Company a is offering me 5,000 more. Can you match or beat that? We don't want to make this a competition because the employer could easily say, Well, then go to company a, Go, Go on. I've got I've got a line of people. I'm sure you've seen where there are more and more layoffs that are happening. That means it's going to be a more competitive market. In fact, I was just on LinkedIn and I saw that one of our alum just recently got laid off. And so he's asking for help with his job search and all of that. That's happening across the board in many different sectors. There are, of course, employers still hiring. But now that you have more competition in the job market, you're going to find that shortly after COVID or digest or you know, 2021, it was more of a job seekers market. We could demand more remote. We can demand a higher salary.

We could demand bonuses, sign-on bonuses and such. Well, now that's starting to shift to where it's more of an employer market. And because there are more candidates in the pool, now we need to say, Okay, well, how are we going to negotiate the salary so that you can have that standard of living that you want and need. We need to keep a roof over our head. But we also have to know at times when we can compromise. What is there something that you are willing to compromise on whether it's the commute, maybe you'll travel further in order to get the job that has the salary that you want. Are there certain benefits that you're okay if you don't have because maybe a significant other has the benefits that cover you. So we need to think about what are some of the areas that we can compromise on and what are some of the things we can't compromise on. And when you are negotiating, you do need to be able to logically explain the value that you bring to that employer and why you should be compensated. E.g. a. While back, I had previous colleague who had relocated to an area and she she she took the first job that she could find. It didn't pay very much.

And when she was then applying to another position, it was a much higher position. It was the HR director for an entire region, very high-paying position. And the employer was asking for her salary expectations. And of course, it was gonna be much more than what she was currently making. And on her fourth interview, she was meeting with the Vice President. And the first question out of the gate from the Vice President was, why do you need to make so much more money?

And really what they wanted to know is how she does her research. They didn't want to hear. Well, I have to have I want to have I deserve to have. It was more about, well, this position has this kind of responsibility and here are my skill sets, my education, my background, what I bring to the table. Once she was able to logically explain why she was asking for that salary, the Vice President said, Okay, moving on. They just wanted to make sure she had done her homework and really understood why she was asking for what she was asking for. So we do want to usually wait until we are ready to make the deal. Once they've made that offer of employment. That does not always happen. There are times where it might be brought up in the interview. But for the most part, you, the job seeker, do not want to start talking numbers until the employer has offered you the position or they're the ones bringing up the salary question. Now, there are some instances where, say, there is more legislation now where companies are being made to put some kind of salary range on the job announcement. So that way, you know, if you're wasting your time, they're wasting their time. Some employers are very upfront about their salaries. The majority still are not.

So we do want to we do have to still play this game and we want to wait until the employer has offered us position. We know they want us. Now we can start talking numbers and we need to think about, can you walk away from that opportunity? We don't want to find ourselves in a situation where we desperately need the job and that may happen. But we want to as best as possible try to avoid that. Because there are times where they're gonna be asking the employer will ask even on the application. What is your current salary or your salary history? Again, there are some states that have not Georgia unfortunately, but there are some states that are putting out legislation that restricts employers from asking about the salary history. Because there are certain demographics, certain certain folks that typically get paid lower. There are certain jobs that typically get paid lower. And especially when you're coming out of college, you may have had a lot of the retail jobs. At fast food jobs, they tend to not pay a lot. And now all of a sudden you're asking for a large salary and the employer is like, wait a minute, aren't you used to making $10 an hour?

So some states are going away from that because we don't want to continue this cycle of constantly being underpaid. And there are some employers, again, even on the application, they will ask, what are your salary expectations? Now, this is where your research really comes into play. If you're able to put in an application or on a cover letter that you are open to negotiating the salary. Instead of putting a number, that's always ideal, we want to try to avoid putting numbers out there as best as possible. Now, if you cannot, if you must name a number. And that's why we want to do research way before the interview because this could come up in the interview if someone is not a good interviewer, or they want to just get this out of the way and say, Hey, am I wasting your time? Are you wasting my time? Let's talk numbers before we even continue.

This may come up early on. You want to do your research well in advance so that you have a nice range to give them. I always say a range is good just because you don't want to give give a solid number that's either too high or too low from what their budget is. You definitely don't want to lowball yourself because then that's going to impact what you can put into your 4o1k, what you can put into your retirement that will impact you long term. So we definitely want to try to get as top dollar as possible. So again, thinking about what kind of salary do you need to make to keep the roof over your head? Have the standard of living that you want. And we want to make sure that we're looking at opportunities that at least their lowest number is still above what you desperately have to make. We don't want to make it where you're just barely making ends meet.

That's not where we want to be. We definitely want to be above that. So we have some cushion. But in addition to thinking about the numbers, we want to think about what's important to you in terms of what's on the job. So that takes us actually to our next poll on what do you value in a career besides the salary or in addition to the salary? Again, we want to be able to take a vacation. We want to be able to make our car payments and so forth. But there are some other things that we want to make sure are important as well. In terms of location, that could mean close to home. That could mean in a certain geographic location in terms of another state. Also, what kind of life balance is important to you? Is that even important to you? I once had a coworker.

We all said, Oh, we will work-life balance. And she was like, I don't care about love work-life balance. I want to be challenged at work. That's what's important to me. And of course, some of our team was like, Oh, you don't care about work-life balance. The values aren't the same for everyone. So it looks like the majority of you, what's important to you is location. Some kind of life balance followed very closely by salary and benefits. Career growth is also really important because thinking about for some, some industries and for some companies, it may be really small. So there may not be a lot of growth there, which means that could be lack of earning potential moving forward in your career and having a challenge on the job? Yes. A lot of times we don't want to be just doing the same thing all the time. I know for myself having independence is very important. I don't like a micromanager. Tanya can speak to this as well. Ours well, when I worked on the Gainesville campus, our supervisor Edward, very much lets you do your own work.

And I really, really enjoy that because pretty much want to be left alone. I know what I need to do and I know directors have to tell me what to do when there are things to be done, that's perfectly fine. But for the most part, stay out of my business. I know what I'm doing. And that's very important to me. If I have someone that's always like, What are you doing? I'm like, Oh my gosh, leave me alone. So those kind of things are really important in terms of what's on the job. And is it even having a pleasant working work environment? I got I like my coworkers. I see these people more than I see my family. I got to like where I am because I'm sure some of you may have experienced where you don't mind the work itself, but your co-workers get on your nerves. And then that makes like where you just don't want to go to work. We don't want that. We want to at least wake up and go. Okay. I'm good to go for work. So as we were talking about earlier, when it comes to negotiating your salary, some entry-level positions do not have negotiation.

A couple of weeks ago we had one of our alumni, bonnie, and she was talking about her experiences with negotiating negotiating her salary and the position that she found. It was actually the fall before she graduated. She graduated, I think in about 2018. And so in 2017 is when she actually interviewed for her her first position right out of college. They flew her up to Virginia. She had an evening of casual networking and then the next day was all day interviews. And then they offered her the position the following week. So of course, we were planning on okay. How are we going to negotiate the salary? So they gave they offered her the position. They gave her a salary. And we started off with well, thank you very much. Can we negotiate the entry-level salary? The answer was no. There was no negotiation. However, there were some other benefits that were added to a career growth, blah, blah, blah, blah, blah. So there was no negotiating, but they had other benefits that they could add to it. But a lot of that really does depend on a variety of factors.

What is this position? What is your previous work experience again, what value would skill sets are you bringing to the table? The manager themselves? Is this, uh, where, where do you fit within the organization? All of these things are being looked at as well as what's their budget. A lot of these things have an impact on whether they can negotiate the salary. So one way to start doing some research in advance is through professional associations, the Bureau of Labor Statistics. So that gives you a nice range of what some of the salary ranges are. But also just salary.com, Career One Stop glass door. And really just talking to your friends if you've got any one that works there. So guanine, with this latest position that she got at BlackRock, she had a friend that was working at BlackRock and she was like so what's the salary range for some of the positions that she was looking for, what can she expect and how can she negotiate for the higher end of the salary range? And so sometimes just even talking to your friends and colleagues that can really help out as well. So thinking about all the different ways that you can gather this information well in advance.

That's what we want to be looking at. Again, understanding that full compensation, there's the salary, There's the work environment, but there could be the retirement package. Are they matching your 4o1k? And Eric is definitely going to be talking about that. Are there any education benefits? Will they pay for you to get a master's or doctorate? Are there any bonuses, any kind of flexible schedule? All of these things can be really important, especially when thinking about high gas prices and such. Can you have a flexible schedule where it's more of a hybrid? You a lot of places do more of a hybrid schedule. We're we're allowed here in career services during the school semester to have one day at home. And during the summer, we usually can do two days at home, which really does help with one just your peace of mind in terms of I don't have to rush out of the house. Makes for a more calming work environment and also saves on the gas money.

So thinking about that in terms of your salary, if you don't have to pay for parking that week or that day, that saves you some money there as well. And as we talked about last week with our moving on and moving out relocation, do they help with that? Guanine is first employer helped with relocation costs up to Virginia. So all of these things are part of that compensation package in addition to the base salary. So thinking about it in terms of a whole picture here. So when you are negotiating, you do want to fully understand the entire offer. Go ahead and ask questions. If you don't understand something, make sure you fully understand. You do not want to sign on the dotted line. Only to realize months or years later, you could have gotten a better deal. Or that wasn't really what you were looking for. You do not have to accept the offer on the spot. You can ask for a couple of days to think about it. But makes sure that if you say, I'll get back to you in 48 h, make sure you really do that. If there are other things to negotiate, you could negotiate things such as any kind of benefits or vacation. If the salary can't be budged on. But you don't want to be playing games in terms of doing a little bit at a time. And again. Comparing it, uh, oh, I've got another offer over here.

Like I said, right now it's going to start turning into an employer's market. They may go in and you can go ahead and go. You do want to be confident in that counter office, but offer, but you want to remain neutral during the process. Even though this is an emotional experience, getting a job, the whole job search, it can be very stressful, but we don't want to be like, Oh my gosh, I have to have this because that's going to turn them off right away. We don't want to negotiate and little tiny pieces where okay, now that we got my salary, now let's talk vacation now. We got my vacation. Now let's talk for a one k. Now that we've got the four, they're gonna get annoyed pretty quick and we don't want that to happen. We also want to make sure that we have a good counteroffer.

We don't want to ask for an extra hundred dollars more. You're just going to look silly and we don't want that to happen in the entire process really should be in writing, even if it's through e-mail, even if you're the one initiating it, even at the end of it, you whoever offered you the job, whether it was HR or the hiring manager, that's the person you wanna be talking to. And you may even need to say at the very end of this whole negotiation process, okay, this is what we've agreed on. It makes sure that all of that's in writing so that in case anything changes, you can always go back to that. You do want to say positive throughout all this. Again, you don't want to say I have to have I need to have. Instead, it could be I had more in mind than what you offer and what can we do? Let's make this a conversation. And you can make it more of an exploratory kind of language would if we consider, how do you feel about what are the alternatives? So using that kind of language makes it more to where it's open to conversation and not so much of a competition where it seems like, oh, we gotta be combative here. We don't we don't want that in this whole process. If you accept the offer, you do want to accept with enthusiasm well before that deadline.

Again, except through the through the person who had offered you the position. Always send thank you. Notes throughout the whole process. You want to make sure that you think everyone, whether it was a hiring manager, the recruiter, a colleague, who told you about the opportunity. Make sure you have all of that. All those thank you. Is there. Now, if you do have to decline the offer, again, you want to explain why, but you also want to do so very graciously. Maybe it's just you couldn't come to an agreement, but leave the door open for future possibilities. You never know their budget may change. You never know what can happen. Then if anything else, if you want to apply to a position again in the future, at least you left the bridge intact and you left everything on a positive note. So now I am going to turn this over to Eric because now he's gonna be talking about, Okay, we've got the job, we've got the salary. Now we need to know how to really maximize that for o1k so that you actually have a really good retirement fund built up. Because everybody wants to work forever, right? I know it's it's kind of odd timing you're getting the job. He just accepted the offer right out of college. You should be thrilled about that and not thinking about retirement.

But if you concentrate only on work and don't start contributing to all of these benefits that you're getting through the company. You're doing yourself a disservice. So we want to talk a little bit about a four or one K, how it works and what the consequences are or the benefits are starting early or starting late. So what is a 4o1k? Before I say this, let me ask. I'm sure there's some of you out there who already have a four or one k either through a part-time job or through their previous employer. I'm not going to ask you to self-identify, but for those of you who don't, you may not know that the 41k is yours. You can take it with you from job to job. There are certain vesting periods to where the employer part may not travel with you, but that would be a short-term hiring situation to where you're not with a company very long. So keep in mind that this is yours. So it's important to know what is your responsibility within it. So what is a 401? It's an employer sponsored savings plans. So you are going to be evaluating employers based upon in part what therefore a one k looks like. It could be a decision that influences whether or not you leave.

If there's a substantially better for one K plan with company a rather than the company you're with now, didn't you may choose to leave for the same salary because the benefit packages that much better. So it is an employer sponsored savings plan to which the employer generally contributes money to your plan as well. If we can have the next slide. Any of you who have. I'm done a little homework on for one case. Watch some YouTube videos, seeing some informational packet somewhere.

You may hear the term free money, that the 4o1k, your employer's matches Freeman. While it may be as close to free money as you're ever going to get in your lifetime. It is not free money, you're working for it. It's part of your benefits package. It's something you should evaluate. So any money that your employer puts in there is money that you should be considered to having earned yourself. So parts of the 41k, So annual contribution limits, these change based on inflation. Usually this year it's up to $20,000, 500 that you can put on your employer or whatever they match goes on top of that. Next year due to inflation, it's going to raise up to 22,500. So in just a couple of months that's going to change. Your employer generally contributes additional money to your plan based upon how much you put in. We're going to go over that part later. Tax-free contributions and tax deferred investment growth. So if you are in a traditional or a one k plan, not a Roth 41k plan, your money is going to be deducted from your paycheck before you pay taxes on it.

So this investment is tax-free, at least until you withdraw the money. You can access the money when you are 59.5 or older. But phishing a half is as soon as you can access this money without paying a penalty, ten per cent generally being the penalty. Why do you want your money to grow tax-free? Well, hopefully, while you're in your peak earning years, you're making more money than you'll need to draw from in retirement. So that puts you in a lower tax bracket. When you're pulling that money out, hopefully your house is paid for at that point, your kids are all through college. You're not actually needing these large bills to be paid, so you can take out less money and still live a better lifestyle. And the whole point of investment growth and paying taxes on investments as little as possible. That's the difference between an IRA or Roth IRA. As the difference between an IRA or Roth. Ira or Roth is just a term attached to these tax-deferred plans that determines when you paid them up. If you've got a Roth plan, you pay taxes first and you have tax-free distribution when you retire. If you have a traditional plan, you contribute tax-free and you pay taxes when you take it out. So with whirlwind Kate, you can have some early access to your money in emergencies or other situations, but it's generally not a good idea.

So how it works, your employer has the 41k plans setup and when you are hired, you have an account created for you. You have the option to opt in during your open enrollment period or when you are hired. And you set a defined percentage that is deducted from your paycheck and placed in that account. For a paycheck period, your employer will match a percentage of your contribution and deposit that into your account after a period of time with the company. The vesting period is what this is called. The employer contribution is yours to take with you to your next job. This is called rolling over your 4o1k. And once you are invested, all of your employer's funds that they put in contribute towards your retirement can go with you. So that's why some people look at it as free money. It's not. Remember you're working for your benefits here. Once you reach 59.5, You may begin to withdraw the money penalty free. You are required to take out minimum distributions at 70 and one-half. Y. Basically think of it this way. The government wants tax money and if you hadn't been paying taxes on it, they want their bar. There is a minimum amount that you have to take out annually at 70.5, but it can still grow while you are in retirement and it really should.

Any withdrawals before 59.5 are subject to taxes and penalties as you see there. Now, if you don't mind, Lauri, I'd like to share. Can everybody see this screen? Once again on another online calculator? And we're going to use this time to plan our retirement, but to explain the plane. So in these areas, right now you are going to be contributing 10% of your annual salary to your 41k. So remember you can contribute in 2022 up to a little over $20,000.

If you look at your annual salary here, it's 50,000. So 10% of that, you're contributing $5,000 a year or two year for one case. So you got a lot of room to wiggle there. If you can find, I'm a lifestyle that lets you put more money in there. For this example, we're going to say you don't get a raise for the rest of your life and you stay with the same company for your entire employment. Now, you're gonna get a raise to worry about that and they'll probably change jobs once or twice. But we want to see the effects of interest rates and time. So we're going to hold all that static for now. We're going to start you at 22. We're going to say you want to retire in 40 years at age 62. And we're going to start with a starting balance of $1,000 just because we have to have a number in here. And right now, we're going for. We're targeting an annual rate of return around 4%, which is a very safe return on investment. You shit and lose a whole lot of funds based on market conditions with a 4% return. Now we get to the employer match. So in this case, your employer is matching 50% of all funds up to a total of 10% of your annual income. So as we stated, 10% of $50,000 is 5,000. So your employer will put dollar for dollar up until it reaches 50% of 5,000 or 2,500. So they're going to match half of all the funds you're putting in. So when we know we can put $20,500 in this year, you're leaving money on the table in this example, right? Because your employer is going to match up to 10% of your entire income. So they're only putting in half and what they're willing to put in. In this condition. If this number is 100%, now, you are maxing out what they're willing to put in.

You're putting in 10%. They're mashing all the way up to 10%. So it makes sense to everyone. Please stop me with questions along the way. This can get a little interesting. Dropped his back down to 50%. And who here, I want to see you in the chat. I actually want to see in the chat. And who thinks they can afford to retire on $732,000? I should have had a poll said this, Lori, I can't actually read the chat while I'm presenting, but are we getting some yeses? Most people are saying no. Okay. No. Sorry, Tanya. No, no, no, no. No. That depends on what kind of lifestyle you want to lead and where you want to live. What do you want to do in retirement and what bills you have in retirement because $732,000.04 o1k and that's allowed to grow with you taking out distributions and maybe 30 or $40,000 a year, you may be able to retire on $700,000. But if you want to travel the world for the next 2030, 40 years, maybe you can't. Alright, so that said, it depends question. You're getting close to being able to retire here and be comfortable that the fact that your money is not going to run out when you're 92 and you have to go to work Donald's. But you're not sure of that, right? So let's talk a little bit about annual rate of return. Can anybody here put in the chat if they know what the annual rate of return is in the stock market. Over the last hundred years.

Is it 7%? Is 8 910-121-5208 to 12%, 7%, seven to 14%. About seven to 147 to 12%. So you all are, I was looking for one percentage, so you're all hedging your bets. That's always a good thing to do. Over the last hundred years. The annual return on the stock market. And we all know it goes up and down constant, right? But if you look out long enough, that line gets pretty flat. 10% return is what the stock market averages year-to-year based on how long you've got to be in it. Now, why would you want to be at 4% and not shoot for 10%? Well, if you're getting closer to retirement, you may want to scale back. If you're looking at, hey, remember you can change this to an open enrollment each year. If you've got 2 million, $3 million in year 4o1k, You don't want to be nearly as risky if you know that you're going to be able to comfortably retire on that money. So you'll want to scale back there. Yes. Some of you may have hurt. And I do actually believe in this that you can be riskier when you're starting off your career.

Why? Well, if you hit some really good years in the stock market during the first five or six years of your career, you can scale it back and feel safer earlier and not have to take as many chances as you're getting closer to retirement. How many of you know exactly what you want to do in retirement right now? Probably very few of you, but that doesn't mean that you don't want to have as much money as possible to make that decision, right? Once again, I need to McDonald's probably a bad, bad time to be there. So let's take a look at a little up in risk here. So $732,000 after 40 years, what if we shoot for 7%, which is still below the annual rate of return in the stock market. Are we getting closer to retirement now? Who here thinks they can retire on $1.5 million? We should have that hand raise function. I'm not going to start. Maybe. You know, somebody wants to live in Bali, right? Like in, remember, this is a static example. Your annual salary increase is zero at this point in time. But the point is to take a look at these returns. If you're starting off and you're like, Hey, let's shoot for 10%. Let's shoot for 10% Early. See what happens. And if that is held static, can you retire on $3.5 million? Okay. Had multiple goals set up. Oh, okay. I hope so. Right. So if you're just taken out to here, just taken up 10% a year there. Alright? And then hoping to earn money on what's leftover, a quick calculation says in retirement, are you going to need $350,000 a year?

Oh, lake house. Yeah. You can get your lighthouse. I'm wrong. So anyway, this is at the market rate of return. If you wanted to start off earlier in your career, maybe shoot for 12% for a few years. If that held steady. I mean, anybody who thinks they can't retire on $6 million needs to come down here and tell me what kind of lifestyle they want to live and talk to you for a little while. May change your mind. I'm not sure. But let's back this back down to say an annual return of 7%. So now you're at $1.5 million, right? You're starting at age 22 and you want to retire at 62, right? I feel like I'm pretty confident in remember that our money grows over time, that if you start at 7% now and move with the market gets some annual raises, this is going to be well over 1.5. Let's just call it the 10% return of 3.5, okay? As we factor in wage growth and other things throughout time. Now, Let's throw in a little scenario here, you're all about to graduate, right? Otherwise you wouldn't be here or at least seeing graduation at the end of the tunnel. So you get out there and you start and oh, I don't know that anybody wants to volunteer this information, but who here feels like they have the worst car currently sitting in the parking lot and just can't wait to get something that least is reliable and shows that, hey, I've made it up, got that job, I got my degree of working now.

Don't have to buy something super flashy, but I deserve it. I should buy a new car. One of these people, I'm not going to make anybody tell me that you're driving 1982. But if you're one of these people, you're like, Hey, what I'm going to do is I'm gonna get that new car. I need something reliable. I feel like I deserve something that's nice enough to make me feel like I've made it. And I have to commute and opt to not have to worry about my commute every single day and you probably shouldn't. So you decide what I'm gonna do is I'm going to wait to start that for one K for a few years, I'm gonna be really aggressive about paying off my car. And then I'll start contributing to my 41k wants the car is completely paid off. Okay. So in this hypothetical, let's say that you designate $50,000 car and you plan to pay three years and have it completely paid off. Okay. Everybody got that. So in this case, we're not starting at age 22. We wait until age 23 so that we can pay for our 50,000 dollar car. Everybody got that. So here is how much you're 50,000 dollar car actually calls. Want to see it again. Here's weight in three years to start your 4o1k, You lost almost $1 million on your $50,000. So while the employer matches important, the annual rate of return is certainly important.

Don't get me wrong, but you cannot go back and make three years back. You didn't start and you lost that compound growth of this investment time. So this is generally when somebody is sitting in my office starts popping off with a ton of questions. If you do have questions about this and want to do some more What-If and get some more understanding of the four when cows certainly encourage you to book an appointment, come see me. And as we said before, if you have questions while you're in your career, please email me and we'll set up a virtual appointment to talk about it. Hopefully that was a little bit eye-opening and you've got the basics down. So if we could move to the next slide, some of the things that you are required to do is during open enrollment period, you have control over which of these risk levels you're willing to assume you guys are business majors. I'm sure you've all heard the term the risk return trade-off. If something is going to have a lot more risk, it needs to have a lot more potential return. So that's what we're talking about. Putting this in the aggressive fund. Now, aggressive maybe shooting for anywhere 12-17%.

That's pretty aggressive, right? But if you get lucky, you may get to retire at 59.5 as opposed to 62, so on and so forth. And as you scale back down, or it's conservative, we're looking at allocations that are more in bonds and cash equivalents than we are in actual stocks, which are much more volatile than bonds. But because they're more volatile and they're more risky, there needs to be more return associated with those things that tend to market tends to identify that pretty well. As long as you get somebody who's paying attention. Slide, please. So what's an IRA? What's 4o1k? Well, the IRA is a self-directed retirement fund and you can get a Roth IRA where traditional IRA, remember the term Roth just allocate just designates when you're going to pay taxes with a Roth. We Pay taxes upfront with the traditional, we pay taxes on the backend. Okay. So which of these makes more sense? Well, it depends on where you are right now, what's your salary is right now, and what it will be in retirement, which are projected to be in retirement. So in your 20s, maybe a roth make sense to you. If your employer has a Roth four or one K, Perhaps you open up one of those and then you transition to a traditional at a point in the future, keeping your Ralph Borland K open.

Not rolling it over because when you do roll that over, you pay taxes. So be aware that you can have multiple accounts open. Any of these Hugo apparently made a good point. I can't wait to see you. Both have potential investment growth. They both build your wealth and there are tax advantages regardless of whether you're paying a Roth IRA. Or four slides. In there, once again, is how you contact all of us. Hope that was helpful. Ego says time, close compounding interests. Yeah. It's important. As we saw 22-25. Right. Does anyone have any questions regarding anything that we covered? I know there was a lot of information, but all good stuff that's for sure and thank you so much, Eric. It's amazing to see the difference with just three little years can make that investment by putting that in your 4o1k is just absolutely astounding because you wouldn't think that just three years would be $1 million. So yeah, one of the, one of the things I tell students is that one of my missions is to try and get you enough information to where when you make a bad decision to do it on purpose. We don't want you to have to learn through trial and error, like many of us did. So I want to at least if we're not coming up with a plan which I am happy to help with people to actually come up with a plan to achieve success. I want to get you the information so that when you have to make that decision, you're not hearing the stuff for the first time. So there is a question that I have a question.

It says, bet, if we split taxes to go up later, how would this affect our 41k? Compare two taxane it as we put it in an so that was on the bus. Well, i'll I'll tell you one thing. As a general rule in life, you should expect taxes to go up. Benjamin Franklin said two things are certain in life, death and taxes.

And so when you want to get into specifics like that, I would urge you to come in because my answer to almost every single specific question about how does this affect me or what if? What if is always going to start with? It depends. It depends on what you wanna do. Do I have enough to retire? It depends on what you want to do. Git I backoff and pay taxes now or later when I expect taxes to go up. It depends where are you going to live? It's your state have state income tax versus only federal income tax. What are you expecting the taxes to go up by, so on and so forth. So we would take a look there, we could what-if scenarios.

So while it's not a bad question, it's just not one that I can answer completely right now. So I'd rather you come into the office and asked that question. Yeah. Sorry. No, it's a great question though. And there are a lot of what ifs that are out there and career services and student money management. We can meet with you in person and we can meet with you online. Whatever works best for you. You've got our websites there where you can make an appointment. And so I do have just one last poll. It's a two parter. So before this career chat, how confident were you with this information? And after the chat, how confident are you now that you have some more information in your tool belt? And like I said, I know it's a lot, but that's why it's great to meet with us individually. There are a lot of variables that come into play. Whether it's negotiating your salary, whether it's trying to figure out how am I going to save, where am I going to live? How much is this going to cause? There's just so many factors that come into play in some of the L. So just kinda depends on what are your personal career goals, what are your financial goals? Again, what kind of lifestyle do you want to leak, bleed, and have set out for yourself and that's gonna be different for everybody. There's some folks, like Eric said, travel the world and I would be happy with $3 million at retirement timeline on that. But I thought it was interesting and so people said, nope, So I'm like, What are you planning on? Maybe the health care costs are probably what it's going to be. Really. Well, I will, I will say this, that while I'm seeing these answers here, I'm very encouraged that most of these responses are competent, but I could use additional guidance. And let me let you know that as far as the 4o1k is involved, Most companies are going to have some outside the company managed to 41k for them, which will allow you a resource to reach out if you do have questions about your particular for o1k and where you may want to be based on how their returns have been historically. So there will be future guidance for you. Once again, the point of this from my perspective anyway, was to get you enough information to know what you don't know and know when you need to ask a question as opposed to not. Once again, if you want some more individual instruction, I'm happy to meet with any yeah, fantastic.

And for those of you that are business students who are needing pros credit, again, just make sure you have your first and last name in the chat if you haven't given that Titania already. Thank you, Tanya for writing all of that down. For those of you that have only your first-name on your profile, that's if you've got your first and last name. Zoom tracks that registration so you don't have to worry about that. Then of course we'll be sending the roster over to the lovely michelle Ruby, and she'll be making sure that you get your prose credit. So I will go ahead and stop recording.

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