Chapter 5. Mortgage, taxes, identity theft, insurance, and retirement planning

As an adult learner, you may need to deal with mortgages, protect yourself and your families from identity theft, practice safeguarding of lives and assets through insurance, and plan for your children's education while planning for your own retirement. This may be overwhelming and exhausting, especially if you are struggling to make ends meet.

However, it is important to know that you are not alone. Don't be stressed out over the unknown. You should focus on what you can establish and control while keeping your life simple and basic until you are in a more comfortable situation.

 

How to

Having said all that, there are the non-negotiables in financial literacy. Here is the list to get you started.

1. Allocate no more than 30% of your net monthly income for mortgage or rent

• Your monthly payment for mortgage or rent should not exceed 30% of your net monthly income
  • If you are paying more than that:
    • You need to explore other options
    • Revisit your monthly budget to find ways to switch allocating funds

2. Understand your taxes 

• It is critical to understand your federal, state, local and property taxes
• You do not want to lose out on deductions and tax credits that might apply to your situation.
• Consider this task as an academic assignment
  • You may choose to do your own research at https://irs.gov/ Links to an external site., take a class, do self-study with our Tax modules (refer to Federal Tax for the US individuals Module or Federal Tax for internationals Module) or attend free workshops on taxes.
  • You may also want to explore tax assistance provided by the U.S. Department of Treasury such as the VITA program (Volunteer Income Tax Assistance). 

3. Protect yourself and your family from identity theft

• You need to take proper measures to protect yourself and your family members from identity theft
• Be sure to protect your computer, cell phones, mailbox, and credit card transactions
  • Watch out for mail and email scams
  • The best antidote to identity theft is self-protection
  • Avoid responding to any inquiries in mail or emails
  • You can stay in charge of your inquiries by initiating financial transactions with appropriate institutions instead of responding to offers that might come your way

4. Stay appropriately insured

• It is a cost that you need to find a way to work into your budget
• Insurance coverage is a serious crisis that the nation has been trying to solve for decades

5. Do not postpone retirement planning

• Retirement planning might be the last thing on your mind right now
• You will need a steady income to take care of yourself in your golden years
• Once you graduate and search for new employment or transfer to a better job, and before you accept any offer, make sure retirement planning is a part of the package
  • If it is not through your employment, you should explore individual investments in retirement plans

 

Practice

Now that you know the basics of what an adult learner needs to focus on in financial literacy, think of paying it forward and discuss it with a friend or a family member.

 

Congratulations! Now test your knowledge about Adult learners! 

Would you like to review again? You can start over at Introduction.

To review the full module on Adult Learners, click here.

 

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The Penn State Sokolov-Miller Family Financial and Life Skills Center hopes you have enjoyed this module in the MoneyCounts: A Penn State Financial Literacy Series. Please tell us how we can serve you better, leave us feedback, ask a question, or request additional information at: finlit@psu.edu