New Course Focuses On Retirement Planning, Other Personal Finance Needs

UNIVERSITY PARK, PA (October 24, 2007) – After graduation, many Penn State students will find themselves choosing health insurance, planning for retirement, and perhaps buying their first homes. To assist with these and other major financial decisions, Penn State's Smeal College of Business is offering a new course to provide students with the skills and knowledge they need to manage their everyday and long-term personal finance needs.

The half-semester course, entitled Personal Financial Planning, provides students with a practical understanding of personal finance, with a focus on creating financial independence and building wealth for retirement.

"With pensions that provide monthly income becoming less common and Social Security facing funding uncertainties, today's students will need to rely more on their own wealth-building initiatives for retirement," said James Miles, Bradley Fellow of Finance at Smeal, who teaches the course with John McGinnis, associate professor of finance at Penn State Altoona. "When you couple that need for solid retirement planning with all the financial decisions that students will be forced to make soon after they graduate, they really need to be armed with accurate information to make the best decisions for their future."

To meet the specific needs of students, all of the course materials, except for one Wall Street Journal article on insurance, were written by Miles and McGinnis, who is a Certified Financial Planner. The Joseph F. Bradley Fellowship Fund helped with course development costs.

The course is divided into five areas of study, focusing first on the basics of saving and investing. Next, students learn about stocks, bonds, and mutual funds.

The third part of the course centers on building wealth and retirement planning, with a focus on 401(k) plans, individual retirement accounts, Social Security, and determining how much wealth one needs to retire.

In the next lesson, students study credit management and insurance. The coursework explores the advantages of credit and dangers associated with accumulating too much debt. It explains the ins and outs of various types of insurance—auto, health, life, homeowners—and ends with a discussion on the options available to students during that period after college and before their first job, when many will find themselves without health insurance.

The final section of the course looks at transportation and housing, examining the costs associated with buying a car and a home, and explaining the nuts and bolts of auto loans and mortgages.

Personal Financial Planning (Finance 397A) is open to all Penn State seniors who are not finance majors. In the future, McGinnis and Miles hope to make the course available to alumni and corporate groups, as well as the general public.