1. Login daily
  2. Pay bills on-time
  3. Adjust 401(k) contribution % and bank account type, as needed
  4. Read simulation communications via email, Dashboard Alert, and push notifications
  5. Maintain their CFS reconciled
  6. Take quizzes and surveys
  7. Review pay stubs and W-2
  8. Use the Student Quick Tips to help navigate the simulation and perform common tasks
  9. Use the Knowledge Base to answer questions about the game, scoring, website navigation, etc.


GOAL: Investing early in life can produce astounding retirement results fueled by the benefits of compounded interest/returns. The benefits of compounding also apply to investing fees which can cut deep into returns. Today you will learn about basic investment information and some general guidelines for how you can begin to think about investing.

  1. Here is what we will do: You will be offered three investment options and we will form groups based on your selection. We will see which group can most closely guess the cost of their investment option after 30 years. You will need to utilize the Investment Diagrams to learn about the three investment options.
    1. Fund 0: W3_Test Drive_Retirement Investing fund 0
    2. Fund 1: W3_Test Drive_Retirement Investing fund 1
    3. Fund 2: W3_Test Drive_Retirement Investing fund 2
    4. Fund 3: W3_Test Drive_Retirement Investing fund 3
  2. Scenario: At the start of your first job, you save $3,000 per year into a 401(k) account. Each year, you increase that amount by $250. This continues every year for 30 years. In this example, the investment earns a 7 percent gross return each year.
  3. Vocabulary:
    1. Trading Fees: Costs associated with buying or selling stock.
    2. Front-end load: Commission fee when buying stock.
    3. Back-end load: Commission fee when selling stock.
    4. On-going Fees: Ongoing costs associated with owning a particular stock.
    5. Expense Ratio: The ratio of fund expenses to fund assets.
    6. Advisory Fees: Typically a percent of investor’s assets.
    7. Annual account fee: Flat annual fee amount.
    8. Actively Managed: Investments with a fund manager frequently trading in the fund to maximize returns.
    9. Passively Managed: Investments that automatically follow trading rules such as mirror a sector of the market.
  4. What would be the value of this retirement investment after 30 years assuming there were absolutely no fees? This is our baseline number. (Answer can be found at the bottom of the table for Fund 0.) ___________________________________
  5. Choose one of the three funds available to fully invest your retirement savings.
    1. Fund 1: Average mutual fund picked by financial advisor
      1. No front-end load
      2. No back-end load
      3. Passively managed
      4. No Annual Account Fees
      5. 0.75% expense ratio
    2. Fund 2: S&P 500 Index Fund
      1. No front-end load
      2. No back-end load
      3. Passively managed
      4. No Annual Account Fees
      5. 0.1% expense ratio
    3. Fund 3: Mutual fund actively managed by well-known fund manager
      1. No front-end load
      2. No back-end load
      3. Actively managed
      4. No Annual Account Fees
      5. 1.5% expense ratio
  6. Write down a guess for the total cost of fees that would accumulate for your fund after 30 years.
    1. Fund Chosen: _____________________
    2. Guess of Total Fees in 30 years $________________________________________
  7. Divide up into groups according to the fund chosen and pick a team captain.
  8. Each captain should refer to the handouts for each fund to help answer the following questions.
    1. What is the Net Return percentage for each fund?
      1. Fund 1:___________________ Fund 2: ______________________ Fund 3: ___________________________
    2. What is the total cost in fees for each fund after 30 years:
      1. Fund 1: $___________________ Fund 2: $_____________________ Fund 3: $__________________________
    3. What is the total cost in fees as a percentage of the baseline amount the investment would be worth, if there were no fees?
      1. Fund 1: __________________% Fund 2: _____________________% Fund 3: __________________________%
    4. Who had the closest guess to the total fees for their team’s fund? How much was the difference between the guess and actual?
      1. Fund 1:___________________ Fund 2: ______________________ Fund 3: ___________________________
  9. The team with the smallest difference to the actual amount is the winner.
  10. Now, understanding the fees associated with each fund, which one would you choose? ___________________________________
  11. Navigation Tip #1: Automate savings
    1. Experiment with the 401(k) deduction change feature located at Student Home>401k.
    2. Notice how this “pays” your future self first and prevents you from dipping into that budget
    3. Notice the benefit of tax deferred savings with a 401(k) or IRA
    4. Notice even small amounts can become large with compounding interest over time
  12. Navigation Tip #2: Keep it simple and diversified with index funds or market-aligned mutual funds
    1. Notice how funds are invested from choices made on a 401(k) plan
    2. Evaluating index funds or market aligned mutual funds that are automatically managed keeping it simple and saving transaction costs
  13. Navigation Tip #3: Keep investing fees low.
    1. Notice the transaction costs associated with changes in an investment portfolio
    2. In the H&R Block Budget Challenge, the portfolio remains constant but an example in the Test Drive is provided to illustrate how investment fees impact long term savings potential.
  14. Navigation Tip #4: Make your own investment decisions.
    1. Compare broker commissions and incentives as related to trading activity to the value of professional investment advice.
  15. DID YOU KNOW: Early withdrawal from retirement accounts such as 401(k), 403(b), and IRA carry large penalties.


GOAL: Today you will have the opportunity to learn how to become a millionaire!

  1. How would you respond?: If I had a million dollars I would:
  2. What do you think you would need to do to save that much money?
  3. One way to accumulate wealth is to start a 401(k) (consult the Student Glossary for a definition).
  4. Research the following questions about 401(k)s:
    1. How do I get a 401(k)?
    2. How do I save in a 401(k)?
    3. What if my employer doesn’t offer a 401(k)—what other options do I have?
    4. What is a 401(k) match?
    5. How does a 401(k) grow?
  5. Check out this compound interest calculator available at calculator/compound-interest-calculator to see how quickly investments can grow.
  6. Do the following. You may use the internet to help you.
      1. Lauren is a 23-year-old office assistant who makes $36,000 a year. She spends a lot on clothes and entertainment, but would love to be a millionaire some day. Help Lauren see she CAN be a millionaire if she starts saving to a 401(k) now. Write your answers on a separate sheet of paper.
      2. START IT: Lauren’s employer offers a 401(k) plan with a 5% match. What percentage of Lauren’s paycheck should she contribute to her 401(k) and why?
      3. RISK IT: Lauren can control the risk for her 401(k) investments— low (3% annual return), medium (6% return), or high (9% return). What risk level do you recommend? Why?
      4. COMPOUND IT: If Lauren takes your advice and starts with $500 in her 401(k), how much will she have at age 25? At 30? (Go to calculators/compoundinterest-calculator to help you answer.)
      5. MARKET BOOM: When Lauren turns 30, the market booms. Low risk returns stay at 3%, but medium-risk increases to 7% and high-risk increases to 12%. Should Lauren adjust her risk level? Why or why not? If the boom carries to age 35, how much will Lauren have in her account?
      6. MAX IT: The maximum Lauren can save in her 401(k) is limited by law. If she gets a raise at age 35 and now makes $200,000, can she contribute to her 401(k) at the same rate? Why or why not? If not, recommend a new contribution rate.
      7. ADD TO IT: Based on Lauren’s raise and her new contribution rate, how much will she have in her 401(k) at age 40? 45? 50? Assume the market has leveled to its normal rate of return.
      8. MARKET SETBACK: At age 50, the market experiences a setback. Low risk returns stay at 3%, but medium-risk decreases to 4% and high-risk decreases to 7%. Should Lauren adjust her risk level? Why or why not? If the setback carries to age 55, what will Lauren’s balance be?
      9. USE IT?: At age 55, Lauren considers withdrawing money from her 401(k) to help pay her daughter’s college tuition, but understands there is a penalty. What is the penalty for withdrawing early? Should Lauren make the withdrawal? Why or why not?
      10. DID SHE MAKE IT?: It’s retirement time. Did Lauren become a millionaire by using your recommendations? Why or why not?
  7. Answer the following in a Google Doc shared with me:
    1. Do you think it’s easy to become a millionaire? Why or why not?
    2. What did you learn about wealth building from your research on 401(k)s?
    3. How have your beliefs changed about saving for retirement?