Year-end review of 2015 personal finance events for eXtension Military Families Learning Network

1. 2015 Personal Finance
Year in Review
https://learn.extension.org/events/2160
This material is based upon work supported by the National Institute of Food and Agriculture, U.S. Department of Agriculture, and the Office of Family
Readiness Policy, U.S. Department of Defense under Award Numbers 2010-48869-20685, 2012-48755-20306, and 2014-48770-22587.
Barbara O’Neill, Ph.D., CFP®, Rutgers Cooperative Extension
oneill@aesop.rutgers.edu

2. Research and evidenced-based
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This material is based upon work supported by the National Institute of Food and Agriculture, U.S. Department of Agriculture, and the Office of Family
Readiness Policy, U.S. Department of Defense under Award Numbers 2010-48869-20685, 2012-48755-20306, and 2014-48770-22587.
www.extension.org/62581

4. Webinar Objectives
Present a 2015 “Financial Year in Review”
• Key findings from 2015 personal finance studies (non-academic)
• Key findings from 2015 government data
• Key 2015 financial events and trends and products
• Key government legislation/policies affecting personal finances
• New or revised financial education resources in 2015
• Preview of expected 2016 personal finance changes
• Key take-aways of 2015 events for financial practitioners

5. Reference Links
• Each 2015 event that is listed has a reference link
• Consider opening up the reference links if you have a
second monitor
• Some links, unfortunately, have “pay walls” or you can
only see a research study abstract for free
• You may be able to see enough of the article (title,
author, date) to be able to find it through a search

6. Q1: What Do You Think
Was the MOST
Significant Personal
Finance Event of 2015?

7. Key Findings From
2015 Personal
Finance Studies

8. Information Search: A Health
and Personal Finance Link ?
• 2015 Study: Individuals who engage in health search
behaviors (e.g., reading nutrition details of food labels) are
more likely to engage in financial planning activities
• Financial planning was proxied through five different retirement
readiness activities
• N = 4,825 cases
• Cognitive process had significant health-wealth relationship but
direct physical activities (e.g., exercise) did not
http://afcpe.org/assets/pdf/volume_26_1/pages_3-16.pdf

9. Lack of Assets and Younger
Death are Related
• 2015 EBRI study: Correlation between those with
little or no assets and those who die between ages
50 and 64, probably due to poorer health
• Households that lost members at relatively young
ages were also households with lower income and
asset holdings
• 29.8% had no assets left; likely worse off than 85+
• N = 1,189; University of Michigan Health and
Retirement Study data
http://www.ebri.org/pdf/notespdf/EBRI_Notes_04_Apr15_EoL-PolFor.pdf

10. Financial Cost of Smoking: At
Least 1.1 Million in a Lifetime
Wallet Hub state-by-state analysis
Sources: USA Today
(1/22/15):
http://www.usatoday.com/story/news/n
ation/2015/01/22/cost-of-
smoking/22144969/
https://wallethub.com/edu/the-
financial-cost-of-smoking-by-
state/9520/
Costs included cost of
tobacco, health-care
costs, income losses,
and other expenses
such as insurance

11. Fewer Americans Lack
Health Insurance
• JAMA Article (7/15): Drop of 7.9% in number of
Americans who reported being uninsured
• Minorities saw the biggest reductions
• Impossible to know if changes are solely and directly
related to the ACA
– Economic recovery may have also had impact
http://jama.jamanetwork.com/article.aspx?articleid=2411283

12. Understanding the Uninsured
• May 2015 Robert Wood Johnson Foundation study
• Survey of 1,270 uninsured adults age 18-64
– N = 469 Latinos
• Most uninsured think health insurance is important
• Cost remains the main barrier
– Calculated decision includes all OOP costs
• Other reasons: ability to still get care and pay OOP
and perception of insurance as a “commitment”
• Knowledge gaps: tax credits & special enrollment
http://www.rwjf.org/content/dam/farm/reports/surveys_and_polls/2015/rwjf420854

13. Scary Projections for Retirees
• HealthView Services Report (3/15): 66-year old
couple retiring in 2015 with average Social Security
benefits can expect medical costs to consume 67% of
lifetime SS
– About 90% of SS for 55-year old couple retiring in 10 years
• Social Security benefits grow by about 2% a year
• Medical costs grow by 5% to 7% a year
• Dental, vision, hearing not covered by Medicare
http://blogs.wsj.com/totalreturn/2015/03/26/grim-news-on-health-costs-in-retirement/

14. More Scary Projections
• Fidelity ‘s Retirement Health Care Cost Estimate
(10/15): https://www.fidelity.com/about-fidelity/employer-
services/health-care-costs-for-couples-retirement-rise
• Retiree health care costs up 29% since 2005
• Estimated cost: $245,000 throughout retirement for a
couple with both spouses age 65
• Assumes Medicare enrollment
• Did not include LTC expenses (e.g., nursing home)
• Health care is top concern for ¾ of couples but only
22% had factored it into planning
http://www.fa-mag.com/news/health-care-costs-for-retirees-keep-
increasing-23401.html

15. Retirement Planning
Disconnects
• TIAA-CREF Survey of 1,000 U.S. adults (2/15):
http://www.fa-mag.com/news/most-people-want-lifetime-
income-but-don-t-know-how-to-make-it-happen-20729.html
• 84% want guaranteed income stream in retirement
• 46% concerned they will run out of money
• Only 14% have purchased an annuity to secure a
steady stream if income
• 29% are saving nothing at all for retirement

16. 2015 EBRI Retirement
Confidence Survey(RCS)
• Survey of 1,003 workers and 1,001 retirees
• Almost a third (28%) of workers have < $1,000 in
savings and investments for retirement
• 57% say they have < $25,000
• 50% of retirees left the workforce earlier than
planned (health, downsizing, etc.)
• 69% of workers said they could save $25 more than
current savings ($1,300 a year)
http://www.ebri.org/pdf/surveys/rcs/2015/EBRI_IB_413_Apr15_RCS-2015.pdf

17. Rising Equity Glide Paths?
• Declining and static equity glide paths in retirement
are increasingly being questioned:
• Kitces and Pfau (2014):
http://www.aaii.com/journal/article/reduce-stock-
exposure-in-retirement-or-gradually-increase-it.touch
• Delorme (2015):
http://www.aaii.com/journal/article/mathematical-
support-for-rising-equity-glide-paths
• Take-Away: Increasing equity allocation in retirement
can provide higher lifetime income

18. Q2: What Was the MOST
Significant Personal
Finance Event FOR YOU
PERSONALLY in 2015?

19. Annual Savings Survey (2015)
• Conducted for 2015 America Saves Week
• N = 1,009 adult Americans (cell & landline phone)
• Small improvements in nearly a dozen savings
indicators (e.g., spending less than income)
• Improvements in consumer indebtedness
• Those with a savings plan with specific goals save
more successfully than those without a plan
http://consumerfed.org/press_release/annual-savings-survey-
reveals-across-the-board-improvement-in-past-year/

20. 529 Plan Knowledge
• Edward Jones (investment firm) survey: 66% of
Americans don’t know what a 529 plan is
• 41% said it was a retirement savings plan and
25% said they didn’t know
• 529 plans have been around for > 15 years
http://blogs.wsj.com/totalreturn/2015/05/13/most-
people-get-an-f-on-529-plan-knowledge/

21. Economic Value of College-1
• Second annual Gallup-Purdue index
• Polled > 30,000 college graduates during first six
months of 2015
• Recent grads were significantly less likely to believe
their education was worth the cost compared with
older alumni
• One of the main reasons was student loan debt
http://www.gallup.com/services/185888/gallup-purdue-index-
report-2015.aspx

22. Economic Value of College- 2
• College degrees pay off with higher lifetime earnings
• Earnings for those with degrees averaged about
$20,300 more per year over the past 4 decades
• Lifetime ROI of more than $420,000
• New college grads start out earning $5,000-$6,000 >
H.S. grads; gap grows to $25,000 after 15 years
http://www.bloomberg.com/news/articles/2015-04-02/does-college-pay-almost-always-
yes-san-francisco-fed-says
http://www.sffed-
education.org/annualreport2014/files/2014%20Annual%20Report%20Essays.pdf

23. Credit Scores and Marriage
• Federal Reserve Board study (8/15): credit scores
might be able to predict marriage stability
• People with higher credit scores (or whatever
personal qualities credit scores represent) were
more likely to form committed relationships and
marriages and stay in them
• Wide gap in credit scores, more likely to break up
• Controlled for education, race, income, other factors
• http://www.federalreserve.gov/econresdata/feds/201
5/files/2015081pap.pdf

24. Growing Wealth Inequality
• One reason for wealth inequality is income inequality
• Racial and ethnic disparities are growing
• The racial wealth gap grows sharply with age
http://datatools.urban.org/Features/wealth-inequality-charts/
• Richest 1% in the world will control >50% of world’s
wealth by 2016
http://www.fa-mag.com/news/richest-1--will-dominate-world-wealth-in-2016--
oxfam-says-20487.html
https://www.oxfam.org/en/pressroom/pressreleases/2015-01-19/richest-1-will-
own-more-all-rest-2016

25. Investor Sophistication and
Target-Date Funds
• 2015 study by Guillemette et al.
• Americans with low investor sophistication are
22.2% more likely to primarily use target-date funds
to save for retirement
• Evidence provided that investors who stand to
benefit the most from target-date investing are the
ones more likely to use this product
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2596661

26. Key Findings From
2015 Government
Data

27. GAO Retirement Security Study
• May 2015 report: http://www.gao.gov/assets/680/670153.pdf
• Examined Federal Reserve SCF data
• About half (52%) of households age 55+ have NO
retirement savings (e.g., IRA or 401(k) plan)
• Many without savings have few other resources to
draw on (e.g., DB pension or non-retirement savings)
• Median savings amount of those with savings:
– $104,000 age 55-64 (equal to $310/month annuity)
– $148,000 age 65-74 (equal to $649/month annuity)

28. Gender Wage Gap
• 2015 Census Study: The U.S. gender wage gap is
the lowest it’s ever been in history
• The gap is 21 cents: women earn 79 cents for every
dollar men earn, on average
• More a result of men’s wages stagnating than
decreased gender bias
http://www.taketheleadwomen.com/blog/the-gender-wage-gap-
hits-an-all-time-low-but-hold-the-confetti/
https://www.census.gov/content/dam/Census/library/publications
/2015/demo/p60-252.pdf

29. Q3: Any Other
Interesting 2015
Financial Surveys That
You Remember?

30. Key 2015 Financial
Events and Trends
and Products

31. 2015 ACA Penalty for Lack of
Qualified Health Coverage
• Called a “shared responsibility payment” by the IRS
– In effect, an extra tax
– Substantially higher than 2014 amount
• Taxpayers owe the GREATER OF a flat assessment or a
percentage of income
• The 2015 flat assessment penalty is $325 per individual with
a maximum of $975 per household
• The 2015 percentage of income penalty is 2%, up to a
maximum of about $12,850
Resource: Tax Policy Center ACA Tax Penalty Calculator:
http://taxpolicycenter.org/taxfacts/acacalculator.cfm

32. Supreme Court ACA Decision
• 6-3 SCOTUS ruling in June 2015
• Upheld the use of subsidies nationwide to help
Americans buy health insurance
• About 87% of those who bought a plan or re-enrolled
in the federal marketplace in 2015 received
subsidies
http://www.wsj.com/articles/health-costs-hinge-on-
supreme-court-ruling-1432607402

33. ACA and Tax Filing Season
• 2015: first year to integrate ACA and income taxes
• Incorrect tax statements (1095-A forms) mailed; tax
filing delays
• “Issues” for people lacking health insurance or
incorrectly estimating 2014 income
• Too high APTCs reduced refunds or resulted in tax
bills
• Marketplaces rely on consumers to report changes

34. Increased Health Savings
Account (HSA) Use
• HSA: Pre-tax savings for OOP medical expenses
• Maximum 2015 HSA contribution: $3,350 (single)
and $6,650 (family) + $1,000 if age 55 and older
• Must have health insurance with a deductible of at
least $1,300 (individual) or $2,600 (family)
• “Shadow Retirement Plan”: After age 65, no penalty
for withdrawing money for nonmedical use
– Only works if you are healthy with few OOP expenses
• High earners also reduce risk of getting hit with 3.8%
surtax on net investment income

35. Workplace Wellness Programs
• April 2015 EEOC regulation: U.S. employers can
reward workers with up to 30% of cost of health
insurance in return for wellness program participation
• More than a third of employers charge a penalty that
averages $50 a month if workers don’t participate
– Some charge as much as $1,600 a year
• Some companies penalize “holdouts” by removing
company HSA contributions and charging tobacco-
related surcharges
http://www.fa-mag.com/news/employers-can-pay-workers-for-
weight--exercise--u-s--says-21500.html

36. Medicare Turned 50 in 2015
• “Medicare for a New Generation”
• If still working at 65 and haven’t claimed Social
Security, enrollment isn’t automatic
• Must go to www.socialsecurity.gov three months
before turning 65 and sign up for free Part A (and Part
B if no employer coverage)
• Must enroll in Part B within 8 months after the month
you retire to avoid risking late penalties
• Substantial penalties and waiting periods
http://m.kiplinger.com/article/insurance/T027-C000-S002-guide-to-getting-the-
most-out-of-medicare-2015.html

37. Long-Term Care Insurance
• “Policies are getting pricier, harder to find, and increasingly
difficult to justify as a worthwhile purchase”:
http://www.wsj.com/articles/long-term-care-insurance-is-it-worth-it-1430488733
• 2014 LTC insurance sales were down 24% from 2013
• Cost for 60-year old couple (for both): $1,685 to $2,813
– With 3% inflation protection: $3,549 to $4,746 for couple
– Based on typical policy with $164,000 of potential proceeds
• New Trend: “Hybrids” (LTC benefits with life insurance, annuities)
• CRR Study: Nearly half of men’s and 36% of women’s nursing
home stays don’t exceed 3 months (within Medicare’s 100-day
maximum): http://crr.bc.edu/wp-content/uploads/2014/11/wp_2014-12.pdf
– Nursing home stays are shorter than previously believed

38. Pension Pressures
• Increasing numbers or employees are receiving
“lump sum vs. pension” offers
• Give up future monthly pension in exchange for a
current lump sum (sure thing vs. an unknown)
• More than 400 company offers since 2012
• Dozens more expected in 2015
• Prompted by new regulations, low interest rates, and
increasing PBGC premiums charged to employers
• Put money in traditional IRA and must take RMDs
http://www.wsj.com/articles/should-you-take-a-lump-sum-pension-offer-1433519945

39. Public Pension Woes
• 87% of the 82 state retirement systems that reported
data for FY 2014 are under-funded
• Top 10 states with most underfunded pensions:
Alaska, Connecticut, Hawaii, Illinois, Kansas,
Kentucky, Louisiana, Massachusetts, Mississippi,
New Hampshire
• Three “Alert” categories: Critical, Severely
Endangered, and Endangered
Source: Understanding Clients’ Underfunded Pension Plans,
Journal of Financial Planning, July 2015, p. 15

40. Bank Fees
• 72% of largest U.S. credit unions offer free checking
vs. only 38% of large banks:
http://time.com/money/3726738/where-to-find-free-checking/
• Record ATM use fees for ATMs not tied to a
customer’s bank account: averaged $4.52 per
transaction and $5 to $8 in some places (10/15 study):
http://www.wsj.com/articles/atm-fees-rise-toward-5-per-withdrawal-
1443981841

41. Same Sex Marriage
• SCOTUS Ruling: Same-sex couples have a right to marry
in every U.S. state
• Same-sex couples can file joint federal and state income
tax returns
• Marriage penalty or marriage bonus could kick in
• Eligibility for Social Security spousal benefits and strategies
such as “file and suspend”
• Eligibility for pension benefits
• Unlimited spousal asset inheritance and combined estate
tax exemption
http://m.kiplinger.com/article/taxes/T065-C000-S002-same-
sex-marriage-affects-taxes-social-security.html

42. Robo-Advisors
• Increase in automated investment services
– Examples: Betterment, Wealthfront, FutureAdvisor
• Over $2 billion AUM, primarily from millennials
• Small but growing % of managed wealth
• Services launched by Schwab, Vanguard, Fidelity
• Target market: young, self-directed, and tech savvy
• Compliment or threat to human advisers?
http://www.fa-mag.com/news/will-financial-advisors-become-obsolete-20265.html
http://blogs.wsj.com/moneybeat/2015/03/13/going-robo-what-schwabs-move-means-
for-you/
http://www.wsj.com/articles/putting-robo-advisers-to-the-test-1429887456

43. 529 Plan Rule Change
• Included in ABLE Act (signed 12/19/14)
• Allows 529 plan account holders to change their
investment holdings TWICE a year vs. once
• Psychological boost: don’t feel as locked in
http://www.wsj.com/articles/rule-change-allows-529-
investors-to-adjust-holdings-more-often-1420516879

44. Student Loans
• Outstanding debt: $1.3 trillion and counting:
http://www.finaid.org/loans/studentloandebtclock.phtml
• Nearly 7 million students with debts haven’t made a
payment in a year: http://www.wsj.com/articles/student-
debt-payback-lags-1442189980
• Some 94% of undergraduate private student loans
are cosigned (77% in 2008-09):
http://blogs.wsj.com/totalreturn/2015/06/19/risks-of-cosigning-
student-loans-are-highlighted-by-regulator/

45. Credit Card Security Upgrades
• As of 10/1/15, merchants have to foot the bill for
fraudulent transactions if they haven’t upgraded
terminals to accept more secure credit cards
– Called EMV terminals (Europay, Mastercard and Visa)
• Shifting fraud liability to retailers from creditors
• Consumers received new cards with an embedded
computer chip instead of magnetic stripes
– Stolen card info is useless; data changes with each use
– Causing “turbulence” for subscription sevices (gyms, Netflix)
– Dip cards into a slot at terminal instead of swiping
http://www.wsj.com/articles/card-liability-is-set-to-shift-1443567562

46. Credit Score Update
• Majority of big banks are offering free FICO credit
scores to their customers on monthly statement,
online, or via a mobile app
– Example: Citibank customers can see credit score online
• USAA providing free VantageScore
http://www.kiplinger.com/article/credit/T017-C011-S002-get-a-free-credit-
score-from-your-bank.html
• Experian (credit reporting agency) allows monthly
rent payments to be reported by landlords as
evidence of creditworthiness
http://www.experian.com/credit-education/credit-report-faqs.html

47. U.S. Bankruptcy Filings
• January 2015 American Bankruptcy report: Institute:
Total of 910,090 bankruptcy filings in calendar year
2014 (1/1/14-12/31/14)
• Dipped under one million annual filings for the first
time since 2007
• Reasons cited: high costs to file and sustained low
interest rates
http://www.acainternational.org/creditors-bankruptcy-
filings-decrease-by-12-percent-in-2014-34672.aspx

48. Sustained Drop in Gas Prices
• Cheap gas saved U.S. households $65 billion in first
half of 2015
• “Windfall” spread unevenly through the economy
• Many retailers (clothing, home furnishings) did not
see expected sales uptick
• Increased savings and spending on health care,
autos, travel, hotels, restaurants
http://www.wsj.com/articles/lower-gas-prices-yield-uneven-benefits-
1441390917
http://www.wsj.com/articles/savings-at-the-pump-become-savings-at-the-
bank-1425337448

49. Recent Shopping Trends
• Millennials place a high value on experiences over
“things” and boomers are starting to do likewise
– “the similarities in attitudes across generations is striking”
• Purchasing experiences makes people happier
http://time.com/money/4030036/millennials-boomers-buying-experiences/
• Macy’s closing up to 40 more stores (9/15):
http://money.cnn.com/2015/09/09/news/companies/macys-store-closings/
• More personalized promotions based on previous
purchases
• Earlier holiday layaway plans (Wal-Mart: 8/28/15):
http://abcnews.go.com/Business/christmas-august-walmart-launch-
layaway-plan/story?id=33367633

50. Stock Market Downturn
• 2015 and 2020 target date fund holdings are a
concern to new and close retirees:
http://www.wsj.com/articles/a-bracing-year-for-target-date-funds-1444010538
• “Correction” called a Bear Market called in late
September by CNBC, Marketwatch, Forbes, etc.
http://www.cnbc.com/2015/09/04/6-reasons-the-bear-market-has-just-begun-
commentary.html
http://www.cnbc.com/2015/09/29/we-are-in-a-bear-market-carter-worth.html
http://www.marketwatch.com/story/the-bear-market-has-begun-2015-09-23
http://www.forbes.com/sites/investor/2015/09/21/we-are-in-a-bear-market-
look-at-the-chart/

51. Madoff Victims Settlement
• Madoff Ponzi scheme fraud detected in Fall 2008
• 10/15 Announcement: Madoff victims with less than
$1,161,000 in losses will get ALL their money back
– About 56% of victims
• $7.2 billion returned by widow of Madoff lawyer
– Declared a “major victory”; not typical for fraud cases
http://time.com/money/4080208/madoff-ponzi-scheme-victims-get-million/
http://www.nbcnews.com/business/business-news/most-madoff-victims-will-
now-get-all-their-money-back-n447791

52. Housing Market Trends
• 2015 National Association of Realtors prediction:
“Less than one third of families who lost homes to
foreclosure or other distressed events in the last
decade are likely to become homeowners again”
• Pool of new home buyers is not as big as some are
expecting
• Reasons given: ineligibility to borrow again or won’t
have the desire to buy again
http://www.wsj.com/articles/many-who-lost-homes-to-
foreclosure-in-last-decade-wont-return-nar-1429548640

53. Cell Phone Trends
• Nearly every cell phone user is a smart phone user
• Cell phone purchase subsidies are going away
• So are 2-year contracts tied to cell phone purchases
• Bottom line: re-shop your service
http://www.kiplinger.com/article/business/T057-C000-S002-pay-
for-your-smartphone-save-on-your-plan.html
• New data hog: Live video (e.g. Periscope, Meerkat)
http://www.wsj.com/articles/watch-out-live-video-is-the-new-data-
hog-1443124141

54. Car Buying Trends
• August 2015: Fastest pace of car sales in 10 years
• Even despite stock market downturn
• Key factors: financing incentives and low fuel prices
• One of best sales years for auto industry since 2000
http://www.wsj.com/articles/auto-sales-cool-in-august-
on-later-labor-day-1441108884

55. Q4: Any Other
Interesting 2015
Financial Events,
Trends, or Products?

56. Key Government
Legislation and
Policies Affecting
Personal Finances

57. myRA Rollout
• Proposed in 2014 SOTU address to encourage workers
without company retirement plans to save for retirement
– Like a Roth IRA “on training wheels”
– No fees and no account minimums
• $15,000 cap or 30-year limit; then money must be transferred
to a private Roth IRA
• Secondary role as a reserve fund (workers can withdraw their
own contributions)
• Slow roll out process; official roll out in November 2015:
https://www.washingtonpost.com/news/get-there/wp/2015/11/04/introducing-myra-
a-free-retirement-plan-backed-by-the-u-s-government/
• Video: https://www.youtube.com/watch?v=_qUUt_dKtUU

58. 2015 Income Tax Highlights
• Health insurance penalty
• Higher tax-deferred retirement account limits:
($18,000 + $6,000 catch-up)
• Starting in 2015, you can only make one rollover from
an IRA (to a new account) in a 12-month period
– Does NOT include “trustee to trustee” transfers
– Designed to prevent short-term, interest-free loans
• Indexed federal marginal tax brackets
• Indexed Alternative Minimum Tax (AMT) exemption
amounts (up 1.5% from 2014)

59. Income Tax Identity Theft
• 2015 announcement: Increased cooperation between
the IRS, states, and tax prep firms to deter ID theft
– More information exchanges among them
• 2013: IRS lost $5.8 billion to stolen-identity refund
theft
• At least 12 states will be requesting W-2 forms earlier
from employers in 2016
• Expect heightened security in the future
• Minimize tax refunds so you don’t have to wait
http://www.wsj.com/articles/a-new-joint-effort-to-combat-tax-
identity-theft-1434734299

60. Q5: Any Other
Interesting 2015
Financial Legislation or
Policies?

61. Military Financial Events
• Military Compensation and Retirement Modernization
Commission Report (1/29/15):
http://www.mcrmc.gov/public/docs/report/mcrmc-finalreport-29jan15-hi.pdf
• Military Lending Act Final Rule (7/21/15; effective
10/1/15): https://www.fdic.gov/news/news/financial/2015/fil15037.html
http://www.defense.gov/News/News-Releases/News-Release-
View/Article/612795
http://www.defense.gov/News-Article-View/Article/612675

62. New or Revised
Financial Education
Resources in 2015

63. Annual Limits Relating
to Financial Planning
http://www.cffpinfo.com/annual-limits/

64. Next Gen Personal Finance
(NGPF)

65. Rutgers Cooperative Extension/
NJ Department of Education
Financial Education
Lesson Plans
• Risks and Benefits of Entrepreneurship (85k PDF)
• Compound Interest: Your Best Friend or Worst Enemy (106k PDF)
• Know the Score: Credit Score Modeling and Impacts (360k PDF)
• The Impact of Inflation (128k PDF)
• Monetary Transaction Tools (572k PDF)
http://njaes.rutgers.edu/money/

66. Making the Case for
Financial Literacy
Annual publication of Jump$tart Coalition for
Personal Financial Literacy:
http://jumpstart.org/assets/files/Making-the-
Case-2015.pdf

67. Curated Lists of
Financial Education Resources
• Edudemic (2/15): http://www.edudemic.com/16-
best-teaching-resources-of-2015/
• Jump$tart Coalition (11/15):
http://www.jumpstartcoalition.org/assets/State-
Sites/ME/files/Financial-Education-Resources---
Educator-Recommendations--2015-
Conference.pdf

68. More Curated Financial
Education Resource Lists
• Higher One (7/15):
http://www.higherone.com/knowledge-
center/higher-one-blog/item/82-top-10-online-
student-financial-literacy-resources
• National Youth Involvement Board (2015):
http://www.nyib.org/?page_id=180

69. Q6: Any Other New
Financial Education
Resources Developed in
2015?

70. Preview of Expected
2016 Personal
Finance Changes

71. Social Security
• No 2016 COLA for social Security recipients
• Main reason: low gas prices and CPI index
change
• Same maximum taxable earnings as 2015:
$118,500
• Same earnings limit under FRA as 2015: $15,720
• Quarter of coverage: $1,260 (up from $1,220)
https://www.ssa.gov/news/press/factsheets/colafacts2016.html

72. Retirement Savings Plans
• Same $18,000 401(k), 403(b), TSP, 457 plan limit
• Same $6,000 maximum catch-up ($24,000 maximum)
• Same $5,500 maximum IRA contribution limit
• Same $1,000 maximum catch-up ($6,500 maximum)
• Same $53,000 annual defined contribution limit
http://www.401khelpcenter.com/pdf/2016_plan_limits.pdf
https://www.irs.gov/pub/irs-news/IR-15-118.pdf
http://benefitsattorney.com/charts/maximums/

73. Income and Estate Taxes
• Standard deductions for singles and married
couples will remain the same as 2015
• Personal exemptions will rise $50 from $4,000 in
2015 to $4,050
• Slight increase in AMT exemption
• Estate tax exclusion will rise to $5,450,000, up from
$5,430,000 in 2015
https://www.irs.gov/uac/Newsroom/In-2016-Some-Tax-Benefits-
Increase-Slightly-Due-to-Inflation-Adjustments,-Others-Are-
Unchanged

74. Key Take-Aways
• Retirement (including retiree health care costs) will be
expensive and many people are unprepared
• Consumer knowledge of 529 plans and health
insurance is limited
• Federal income taxes and ACA penalties are related
• Credit card security upgrades are widespread
• Consumer shopping preferences are changing
• Very modest income and estate tax changes in 2016

75. Key Take-Away Applications
• Encourage increased retirement savings in tax-deferred plans
• Provide information on college savings and health insurance
• Integrate health insurance and tax planning information
• Update consumers on ID theft fraud prevention
• Provide information on wise shopping practices for purchases
of interest (e.g., travel, cell phones)
• Update financial education materials with 2016 information

76. Comments? Questions?
oneill@aesop.rutgers.edu
@moneytalk1 on Twitter