White House ‘Financial Capability’ Council Bypasses Retirement Planning
The President's Advisory Council on Financial Capability for Young Americans recently held its annual meeting — but retirement planning was barely mentioned.
One of the Council’s stated goals is to “identify and test promising and tested approaches for increasing planning, savings and investing for retirement by young people.” Unfortunately, other than a passing reference to President Obama's MyRA program, retirement planning was omitted from the two-plus hours of discussion.
Executive Order 13646
, which created the Council, was signed by President Obama on June 25, 2013. The group is comprised of representatives from nonprofits, local governments, large financial institutions and regulatory bodies like FINRA, as well as executive branch officials like Treasury Secretary Jack Lew.
What did the Advisory Council discuss? The youth-facing recipient programs of Treasury’s Financial Empowerment Innovation Fund grants. These programs include experiments in teaching basic economic skills to elementary students and programs to help guide graduating high school seniors through the financial minefield that is planning for, and paying for, college.
One of the grant recipients, the Center for Financial Security of the University of Wisconsin-Madison’s “My Classroom Economy
,” is a randomized trial of up to 100 elementary school classrooms examining the students’ attitudes and knowledge of financial matters through an in-class mock economy where good grades and behaviors earn pretend money and things like forgetting school supplies requires the student to pay “rent” in order to borrow them in the meantime. Another project revealed is MindBlown Labs
’ mobile game, “Thrive ‘n’ Shine,” aimed at improving players’ financial literacy through interactive puzzle-solving. The last project discussed at the meeting was from College Possible
, a group that helps low-income students attend college by engaging with them in their junior and senior years with “targeted and individualized mentoring.”
Arguably these programs are targeted at the broader financial literacy of “Generation Z,” generally considered to be the group of Americans born after 1996. However, it bears mentioning that the next workplace generation — Millennials, or “Generation Y” — those Americans born between 1982 and 1996 — will constitute more than half the workforce by next year, according to a recent report
. Is it too late for them? What novel approaches can encourage them to save through work and on their own? Are they already too old to merit the Council’s attention?
Ray Harmon, Esq., is government affairs counsel for ASPPA.