Richard Thripp A Survey of Investing and Retirement Knowledge and - PowerPoint PPT Presentation

Richard Thripp A Survey of Investing and Retirement Knowledge and Preferences of Florida Preservice Teachers Dissertation Defense Education Ph.D., Instructional Design & Technology University of Central Florida November 7, 2019

Panel Introductions Dr. Richard Hartshorne, Committee Chair Dr. Debbie L. Hahs-Vaughn, Committee Member Dr. Bobby Hoffman, Committee Member Dr. Shiva Jahani, Committee Member Dr. Gary Mottola, External Committee Member Richard Thripp, Doctoral Candidate

Introduction • Preservice teachers • Career has low pay and benefits • Mostly female • Financial knowledge? • Retirement knowledge? Preferences? • Prior research is limited • Survey of 314 UCF preservice teachers

Problem • Florida offers a choice between a defined-benefit (DB) and defined-contribution (DC) retirement plan • Research on preservice teachers’ financial knowledge and preferences is lacking • Teachers are financially disadvantaged • Teachers’ financial knowledge influences students • How little do they know? An open question

Purpose Statement The purpose of this study was to investigate the knowledge and perceptions of Florida preservice teachers toward retirement plans, investing, and personal finance, including challenges they anticipate facing in retirement. This survey of preservice teachers provides a window into participants’ knowledge and financial futures, and supports the importance of financial education in teacher education programs.

Theoretical Framework Financial Wellness Objective Financial Financial Subjective Measures Satisfaction Behaviors Perceptions Goal: A rich level of detail Financial Financial Attitudes Knowledge Financial wellness is multi-faceted Joo (2008)

Research Questions 1. What is the extent of Florida preservice teachers’ knowledge regarding personal finance and investing, the Florida Retirement system, and retirement plans in general? 2. To what extent do Florida preservice teachers anticipate facing financial challenges in funding their retirement and during retirement? 3. Is anticipated teaching career length predicted by DB–DC preference, DB versus salary preference, or level of concern about not meeting Florida’s eight-year DB vesting period? 4. Is the investment allocation sophistication of preservice teachers associated with financial knowledge, types of financial or retirement accounts owned, DB–DC preference, or demographic characteristics? 5. How do Florida preservice teachers compare to college students and graduates ages 18–25 on financial, retirement, and investing knowledge?

Literature Review • Lucey & Norton (2011): Preservice teacher knowledge is limited; I borrowed retirement challenges items from here • One-third of teachers prefer choosing investments (Chingos & West, 2015) , but are ill-equipped (Rhee & Joyner, 2019) • Teacher retirement benefits are shrinking (Snell, 2012) • Teacher financial knowledge and capacity to teach it are both low (Way & Holden, 2009) • Gender gaps  compounding disadvantages for women

Research Methods • Non-experimental • 39-item survey, mostly author-developed • 314 UCF students in teacher education courses • 205 Amazon Mechanical Turk participants • Mostly quantitative, but with open-ended items • Assessed knowledge, preferences, investing skill, concerns, and more

Populations • UCF preservice teachers* ( N = 1,999): • 87% female • 57% White & non-Hispanic • 71% major in elementary or early childhood education • 76% complete degree within 4 years • 20% first-generation students • MTurk: U.S. college students/graduates ages 18–25 * Data from Dr. Orin Smith, Office of the Dean, personal communication, October 24, 2019

Sample: Preservice Teachers ( n = 314) Sections Participants Course EDE 4223: Integrated Arts and Movement in the Elementary School 1 13 EDF 2085: Introduction to Diversity for Educators 3 29 EDF 2130: Child and Adolescent Development for Educators 1 28^ EDF 4603: Analysis and Application of Ethical, Legal, and Safety Issues in Schools 1 24 EME 2040: Introduction to Technology for Educators (Author’s Course) 2 42^ LAE 3414: Literature for Children 2 42 LAE 4314: Language Arts in the Elementary School 2 50 MAE 3310: Elementary Mathematics for Teaching I 1 21 RED 3012: Basic Foundations of Reading 1 17 SSE 3312: Teaching Social Science in the Elementary School 4 48 Total: 10 Courses 18 314 ^ These participants received extra credit

Sample: Preservice Teachers • 87% female • 81% White • 21% Hispanic among Whites; 23% overall • 38.5% Minority • 61.5% White & non-Hispanic • Mean age = 23.5; 90% below Age 30 • 90% upper-level students

Sample: Preservice Teachers Major % M age % Male % Minority n Elementary Education 216 69.7 23.96 6.6 39.0 Early Childhood Development & Education 30 9.7 22.90 0 31.0 Exceptional Education 13 4.2 20.62 0 23.1 Social Science Education 10 3.2 25.50 50.0 30.0 Art Education 8 2.6 21.63 12.5 75.0 Secondary Education 8 2.6 22.50 75.0 57.1 Music Education 6 1.9 21.50 16.7 16.7 Mathematics Education 4 1.3 * * * English Language Arts Education 2 0.6 * * * Science Education 1 0.3 * * * Other or Dual Major 12 3.9 22.33 41.7 41.7 Overall 310 100.0 23.52 11.4 38.4

Sample: MTurk ( n = 205) • Nationwide (7% Florida) • 20% plan to become teachers • 38% female • 74% White • 14% Hispanic among Whites; 14% overall • 37% Minority • 63% White & non-Hispanic • Mean age = 23.1 (restricted 18–25)

Data Collection • 86% in-person paper surveys (preservice) • 14% Qualtrics (preservice) and 100% (MTurk) • Paper vs. Web instruments nearly identical • MTurk participants paid $1.00 • MTurk version omitted Florida items • Extremely low missing data / attrition, except 20% of preservice teachers skipped portfolio allocation exercise (difficult)

Instrument • You have each been given a copy of the paper instrument for preservice teachers • Q21–Q24 and Q26–Q31 borrowed from others* • Any questions to address from committee? * (Peng et al., 2007; Lusardi & Mitchell, 2008; Lucey & Norton, 2011)

MTurk

Results: RQ1 Preservice Knowledge • Very low; only 24% knew this was false: • Buying a single company stock usually provides a safer return than a stock mutual fund • 26% knew FL allows DB/DC choice • 51% knew FL participates in Social Security • 36% knew pensions have minimum vesting periods • Low familiarity with major types of retirement plans • Financial knowledge was lower than a national study • Even when comparing to females ages 18–24

Results: RQ2 Retirement Challenges • Preservice teachers know they may have to work in retirement • They are already anticipating low salaries and not being able to afford discretionary contributions • MTurk participants were more concerned about student loans and credit card debt

“Bad” portfolios: 15% or more in money market or 30% or more in money market and bonds combined

Results: RQs 3–4 • Regressions unsuccessful at predicting preservice teacher anticipated career length or “good” investment allocation • Open-ended responses showed pensions often preferred as commitment devices but immediate needs often come first: • “I would rather know the money is set aside for once I retire than take a chance at spending it along the way because it looks like I’m just being paid more.” • “I’d rather be old and poor when I die knowing I had the capability to provide everything my family could want or need than to die with more money than I would’ve needed for myself at an old age.”

Results: RQ5 MTurk Comparison Familarity With Retirement Plans 5.00 Statistically significant difference of composite score 4.50 found with Mann–Whitney U test ( p < .0001; z = –9.80) 4.00 3.62 3.47 3.50 3.32 3.00 3.00 2.48 2.50 2.03 2.00 1.50 1.00 0.50 0.00 Employer IRA Social Security MTurk Preservice 18–25

Results: RQ5 MTurk Comparison Possession of Accounts by Group 60.0% Statistically significant difference for “Any of 3” 53.3% found with chi-square test ( p < .0001; φ = .406). 50.0% 40.0% 35.5% 30.0% 21.3% 19.8% 20.0% 15.1% 10.5% 10.0% 3.4% 2.9% 0.0% Brokerage 401(k), etc. IRA Any of 3 Preservice 18–25 MTurk

Results: RQ5 MTurk Comparison Financial Knowledge Composite Score Chart 40.0% Statistically significant difference found with 34.5% 35.0% Mann–Whitney U test ( p < .0001; z = –11.00) 30.2% 29.0% 30.0% 26.6% 24.9% 25.0% 22.9% 20.0% 15.6% 15.0% 10.0% 8.3% 6.3% 5.0% 1.6% 0.0% 0 1 2 3 4 MTurk did better even if adding a penalty for wrong MTurk Preservice 18–25 answers (will add to dissertation if requested)

Results: RQ5 MTurk Comparison Mean Fund Contribution Percentages 40.00% “Bad” portfolios: 15% or more in money market or 35.00% 30% or more in money market and bonds combined 31.59% 30.00% 26.34% 24.87% 25.00% 22.96% 22.70% 20.15% 20.00% 18.30% 15.00% 12.32% 11.18% 9.63% 10.00% 5.00% 0.00% Money Market Bonds 2060 U.S. Stocks Foreign Stocks Preservice 18–25 (n = 208) Mturk (n = 205)