RETIREMENT AND COLLEGE PLANNING This Week s Timeline Pre-Video Discussion... 10 minutes Watch Recap... 5 minutes Victories.... 5 minutes Small Group Discussion (including supplemental questions)....15 minutes R:IQ Dream.... 5 minutes Credit Card Exercise... 10 minutes Wrap-Up... 5 minutes Total... 55 minutes 63
BEFORE YOU BEGIN Before the lesson, take some time to watch the video at home just like your class members. If you can t watch one week, download the MP3 while you are out and about. Take some time to review the blanks for the lesson and the information found in the Key Principles & Takeaways section. Key Principles & Takeaways We ve included the appropriate page numbers from the member workbook. In Retirement and College Planning, Dave taught these key principles: n Don t start investing until your emergency fund is in place (page 103 ). n You should never invest in something you don t understand. Remember the KISS principle: Keep it simple, Stupid (page 103 ). n We suggest that you invest 15% of your household income for retirement (page 107 ). n Save for your child s college education using tax-favored plans, including ESAs (educational savings accounts) and 529s (page 108 ). n It is possible to send your kids to college debt-free. In-state tuition, scholarships and work (page 109 ) can help make it happen. The key takeaways from this lesson include the following: n Take control of your own retirement savings. If Social Security is still around when you retire, let that be a bonus, not your primary plan. n Invest with a long-term approach. The only people who get hurt on a roller coaster are the ones who try to get off during the ride. n Make sure your investments are diversified across different kinds of funds (page 104 ). n Keep the Baby Steps in order. Deal with your own retirement before you start saving for your kids college. n Be up-front with your kids about what you can and can t do for their college funds. Work with them to create a debt-free college plan. 64
BEGIN YOUR CLASS Pre-Video Discussion (10 minutes) n Begin circulating the FPU Attendance Sheet for members to sign during the Recap video. n It s time for a budget check! Have members take out their Cash Flow Plans, and check their work. Remind them they don t have to show you their numbers just the zero at the bottom of the page. n Briefly review the material for Lesson 6. In the last lesson, we talked about different kinds of insurance especially what you should and shouldn t have. Looking at the Insurance section of your budget, what types of insurance are you planning to add, change or cancel? How will this impact your budget? 65
RECAP AND REVIEW Watch the Recap (5 minutes) If you are in a space that has the ability to stream a video over the internet, instead of starting the regular video, play the Recap video found here: https://www.fpucentral.com/videos/lesson-7-recap After members have watched the Recap, give them a few minutes to share their takeaways and insights from the primary video they watched at home. Use this time to encourage a spirit of shared experience in the class. To spur the conversation, consider using the following questions: n What s something you heard for the first time? n What was your biggest takeaway from the video? n After watching the video, what are some simple changes you could make to move yourself closer to financial peace? If your members have done their homework for Lesson 7 prior to class, spend a few minutes reviewing their work and answering questions related to that. You can find this week s homework on page 70 of this guide. Victories (5 minutes) It s time to celebrate some wins! Spend this time having your members share any victories they ve already experienced. Examples could be completing a Baby Step, paying off a debt, or even improved communication in their marriage. To get the discussion started, say: Tell us what your biggest takeaway has been, what s made the biggest difference, or if you ve already had some quick wins as you ve gotten started. 66
Small Group Discussion 15 minutes True life-change happens when you open up and work through this material together. Break up into discussion groups of no more than 20 people to talk through the following questions. Be honest in your answers! 1 2 3 Winning with money is not just about building a comfortable retirement for yourself. It also includes leaving a legacy for future generations. Realistically, what type of inheritance would you like to leave your loved ones? What would you like to see them do with it? Parents often struggle with the idea of putting their own retirement plans ahead of their children s college funding. Why is it so important to follow the Baby Steps in order in this area? Why do you think some parents feel compelled to reverse the order of these two steps? Some people struggle with the concept of doing the Baby Steps in order, one step at a time, while setting aside or delaying goals they want to reach immediately. Why is it important to focus all your attention and gazelle intensity on one goal at a time? Supplemental Questions Be sure to leave time for the breakout excercise following discussion time! n When should you start investing for retirement and saving for college? (Answer: As soon as you are out of debt and have 3 6 months of expenses saved for emergencies. Save for your retirement before college.) n Explain the KISS principle. (Answer: KISS stands for Keep it simple, Stupid. ) n What is diversification, and why is it an important part of investing? (Answer: It s a fancy term for spreading your money around inside investments so you can lower risk.) n What are Rachel s four tips for going to college without debt? (Answer: Pick an in-state or community college. Compare on-campus versus off-campus living options. Aim for scholarships with SAT and ACT tutoring. Get a job.) 67
BREAKOUT EXERCISE R:IQ Dream (5 minutes) Retirement isn t an age; it s a financial number. Use Chris Hogan s R:IQ tool to help you start to dream about retirement. Encourage class members to spend some time thinking about what they want their lives to look like when they retire and what kind of legacy they want to leave for their kids and grandkids. Let them share their dreams and what they can do to take a next (or first) step toward making those dreams a reality. Credit Card Exercise (10 minutes) Time for a little plastic surgery! Your members have heard about the dangers of debt and credit cards. Provide a big pair of scissors and give them a chance to cut them up once and for all. Remind them that cutting up the card isn t enough. They still need to close the account with the credit card company. 68
ENDING THE CLASS Class Wrap-Up (5 minutes) Briefly review the homework on page 70 of this guide. Make sure the FPU Attendance Sheet is complete and turned in. Tell everyone that the next lesson is called Real Estate and Mortgages. Point out that in this lesson, Dave and Chris Hogan discuss how and when to buy, sell and rent a house. They will also talk about different kinds of mortgages including what you should avoid. Remind members that if they miss a week or just want to review a lesson, they can watch any video on FPU Central. Remind everyone to bring their budget forms to class every week. After Class Send your class this message through FPU Central: Hi everyone, You may not feel like you re ready to jump into the deep end of investing, and that s okay. Get your emergency fund in place and pay off your debt snowball first then start putting the pieces of your retirement and college fund into place. As you settle the present, start planning for the future. Here is your to-do list for the week: n Complete the FPU Survey. n Do the homework for Lesson 7 if you haven t already. n Watch the video for Lesson 8, Real Estate and Mortgages. In Real Estate and Mortgages, Dave and Chris Hogan share how home ownership fits in the Baby Steps whether you have a house already or see one as a part of your future. See you soon! 69
This Week s Homework Personal finance is 20% head knowledge and 80% behavior. Take charge of your financial behaviors by completing the following tasks this week. Be sure to work with your spouse or accountability partner where noted! Calculate your retirement needs. Use the Retirement Planning Calculator in FPU Central to determine how much you will need for a comfortable retirement and how much you will need to save each month to reach that goal. You can also use the Investing Calculator to see how small changes in your savings plan today can make a huge difference in your retirement later. Calculate your college savings needs. If college funding will be a part of your financial plan, use a college planning calculator to determine how much you will need for education expenses and how much you will need to save each month to reach that goal. Discuss your retirement plans. Singles: Meet with your accountability partner and discuss your retirement plans (and dreams). Review the calculations from the Monthly Retirement Planning exercise together. Married Couples: Call a Budget Committee Meeting to discuss your retirement plans (and dreams). Commit to reach those goals as a team. Reading Assignment: Read the From Fruition to Tuition chapter in Dave Ramsey s Complete Guide to Money. Prepare for next week. Get ready by reading ahead to next week's lesson! 70
FLEX COORDINATOR GUIDE Unless otherwise indicated, all Scripture quotations in this book are from the New King James Version. Copyright 1982, Thomas Nelson, Inc. Used by permission. All rights reserved. Scripture quotations marked (NIV) are taken from The Holy Bible, New International Version. Copyright 1973, 1978, 1984, 2011 by Biblica, Inc. Used by permission. All rights reserved worldwide, www.zondervan.com. Scripture quotations marked (NIV84) are taken from The Holy Bible, New International Version. Copyright 1973, 1978, 1984 by International Bible Society. Used by permission of Zondervan. All rights reserved. Scripture quotations marked (CEV) are taken from The Contemporary English Version. Copyright 1995 by American Bible Society. Used by permission. All rights reserved. Scripture quotations marked (KJV) are taken from the King James Version of the Bible. 2012 Lampo Licensing, LLC. All Rights Reserved. 1749 Mallory Lane Brentwood, TN 37027 This publication is designed to provide accurate and authoritative information with regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting or other professional advice. If legal advice or other expert professional assistance is required, the services of a competent professional person should be sought. From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations Published by Lampo Press. For more information, please visit our website at daveramsey.com.