♪ this is "nightly business report" with bill griffeth and sue herera. >> good evening, everyone and welcome to this special edilyon of "nigusiness report". >> april, if you don't know is financial literacy month devoted to teaching americans how to establish and maintain healthy financial htits. >> and ts a little bit of what we're hoping to do tonight. >> we start with a few f statisti you. according to the federal reserve, 40% of americans don't even have $400 set aside for an emergency. 25% haveothing saved for retirement and a recent survey by cnbc and financial technology firm acorns show that more than a third of t respondents don't make enough money to meet their needs and to save. by the way, nbc universal and comcast ventures are investors

comcast produce this program so as you heard fr the problem is complex and it's not a simple one toe, so but we invited a financial planner at highland financial advisers to help us tackle that. so reid, always nice to have you here >> thank yo sue. let's start with the basics. why is it so important to start one, early and als learn about financials? >> financial literacy is so ouitical. it gives the basic tools to do your own financial planning. we believe financial planning is really the way for you to realize planning for progress and freedom. >> stay there, we've got more questions for you and things to lgo there and's start with one of the big issues out there and that would be retirement anf more than hf adults are feeling better about their retirement plans than they were three years ago, and yet saving r retirement ranks as the

overall top personalinancial concern and that's especially true for those between the ages 45 and 64. >> and given those numbers, we've askedob pisani to dig a little bit deeper into the state of retirement and re what he found. >> do you know where yr retirement is? americans can certainly use help and baby boomers in particular an that's me have not saved nearly enough for retirement and we'll live longer than most t o nk and if the trends continue some of us will run out of money before we die. just look at the state of the three legs of the retirement store. you have private savings, pension and social security. let's start with the private savings. at vanguard the average 401(k) account for an investorye 6s old and up was 123,000 and that is inflated by a small group of super savers. the median balance half have mo and half have less and

$58,000 for a 65-year-old. try averaging that over 20 years. mo americans are expected to live into their 80s and you're not pulling out a lot and 5% of that may be a year and that's $3,000. let' go get pensionand they're not much better and the median private pension is $9,000 a year and finally the social securi in 2018 and the average social security check about a month and say that's $17,000 a year and let's add all of this up. what do we have in we have more than $29,000 a year and it's certainly possible to live on $29,000 a year and if you live in a relatively low-cost part of the country and arit'sy a robust retirement and remember something, these onethe lucky a study by the st. louis federal reserve found only27% of households have a pension plan and only one-third have a defined contribution plan and that's like a 401(k). that's not a lot of people. for "nightly business report"

i'm bob pisani at the new york stock exchange. we do here? ent plan your retir change in the 20s, 30s, 40s and so forth? >> think the importanthing is people need to get started early, obviously. most important is when you're young, 20s and 30s, time ise.n your s you really need to have minimum 70% to 80% in equities. that may continue on for the rest of your life, and it's important to get started with investing early on. ts you get older, you need to be aware of the f that at least 25% to 30% of your portfolio has to remain inquies just to keep pace with inflation. >>h. y you know, you say keep up with n in a on, but we've b relatively low inflation environment which has made it a little bit more challenging than some people in the marketyo but have to stick with it and you have to have the overall plan and investco istently, right? even at low 2.5nflation in 24

years, you will double your standard of living and 12 or 14 years it will be 50% higher and inflation is insidious. it's there and it's a risk that u constantly have to be aware of. >> as you're reducing the equity exposure as you age where does the money go especially in a low interest rate environment? that's a very subjective thing an there a n absolute. people used to think that you would increase i with bonds and that's and antiquay and today you want to think of total return and that's the capital appreciation in additionyo t dividends and interests. so many people as theyecome more comfortable with stocks and they understand how markets work and this comes with financial literacy and understanding, they can take on and maintain that equity into retirement. >> what about using baskets where maybe you have a little bit more diverse portfolio and you're not doing it, even when

working with a financial planner, you're not picking individual stocks. does that raise the comfort level for some people as they get closer to retirent? >> absolutely. diversification has mutual funds and etfs. basically, what you're doing is eliminating two big business risk and industry risk. what you get rewarded for is market risk and market risk is where 70% to 80% of your return will come from anyway. so that's a really prudent way to buy. howe you need to understand your own rick tolerance and people's risk tolerance is different from ractice they put into once the market turns. >> that's the art and science of financial planning and the art is trying to understand the over and work with the the expectations and the reality is through financial literacy, d ation, knowledge, remember there was a clothing company that said the educated are the best customer? well, educated clients become better clients because they're

more likely t sta in their portfolio. >> and also rebalancin right? as the market volatility increase, and you have to take a look o at what you and whether it fits in the plan and rebalance. >> that's right, sue. things will change. whatever you start with over time your portfolio will change. so all of these, again, it comes with knowledge around investments and how it works and what you should do. rebalanc i is a veryortant part of any portfolio manager, absolutely. >> again, stay there. >> we have a lot more ahead. we will turn to washington now, though and retirement may actually be one area where publicans and democrats can actually agree as elon mui reports the two parties are working together to make changes to some very popular savings slan. >> capitol hill considering the biggest piece of retirement legislation in more than ade , and it actually stands a retty good chance of becoming law. it's called the secure act and th knogoal is to expandccess

especially people who work with small businesses. >> it's packaging them all into a comprehensive piece of legislation that would address many of these little issues that have cropped up over the years where solutions have been offered to try to increase the ability of workers to save for their retirement. >> this bill allows small businesses to band together, to offer 401(k) plansor their employees. it repeals the maximum age for ir contributions which is currently 70 1/2 and it requires companies t allow part-time workers to participate in 401(k) plans and it lets you widraw from your ira from a birth or adoption without a penalty and the provision that expands for home schooling and private schoolsr even to pay off your student loans. the house is expected to vote on this bill g soon and iot the backing of top democrats and republicans. gop congressman mike kelly is one of the co sponsors. >> we were sent herey our folks back home to act in their

rest in, or the party's best interest, but in the best interest of the people which to is the real reason why all of us come to washington to >> the senate has been working on a similar proposal. experts are calling it practical, common sense legislation. >> this is the next important step in the process that is ut congress, think there is a lot of optimism toward getting something across the finish line this year. examplecould be a rare of successful bipartisanship amid divided government. for "nightly business report," i'm elon mui in washington. >> the idea behind theseo bills isake all of these plans more accessible toop more , but when you have the number of people we cited at the top of the program and we sti have enough to save after they've met their expenses, what do you say te those peo as they need to save for retirement. >> first on the proposed bills, there have been a lot of pension

regulations in the last 40 years and mostly an attempt to encourage more people toav none of it's really made much of a bud in that because you're facing people and the majority of people don't makenough money to meet their needs week to week and some of the provisions i suggested will not help people and it would look good if they passed a bill and i don't think it will have much of an impact on this, but what people need to start about is if you are living paycheck to paycheck and you need to find money to start saving and obviously retirement is the most important goal you shouldhave, but you need to start with an emergency fund and youneed to get to where first have three to six months of living expenses set aside just to give the freedom to be able to do things like maybe change your career or something like that to start doing this. so it starts with an understanding and financial lit rassy alit and weever use the

word budget and it turns people up. ever business in the world coulds cash flow and every house hole has that. what is your income? it has to be equal to o greater than your expenses and your expenses are discretionary, needs and wants. people mix up the needs and w t wants and you need td the money to start saving for these mightand sometimes you need to re-engineer a career, and then you can look at. once you've got that emergency fund, you set that aside and you don't touchit right? and then it allows you a little bit ofm breathing r for as you mentioned maybe an intermediate term goalheike changing career or going back to school. >> yeah. yeah. and once you have that, start saving for retirement a a 401(k) plan for your employer and a great place to start. >> there may bept pern that you need to have a certain

amount to start that process. you don't. it's ideal if you can save, 5, % of your income and save whatever you can save, right? everyone uses the examplef don't buy starbucks. make your own coffee. thos little thingo add up, but the big things is your housing cost and your seansportation cost and t are the two biggest decisions in your life that will impact what you have available. >> and if you can and you've got access to a 401(k) through your employer, put in as much you can so you get the employer match. >> it's called the and absolutely, learn about the plan and maximize thatf match you do nothing else. you're leaving money on the table. >> we'll let you go at this time. highland financial advisers, thanks for joining us. >> thank you, my pleasure. >> still ahead, has spring sprung for the hou ♪ ♪

♪ ♪ a there has been lot of talk about interest rates lately and that matters because they affec everything from the interest that you receive on your savings that youo the interest pay on a car or home loan. in a nutshell, the higher theat interest and the more you pay to borrow money, and as we learned, anything this spring has had its potentialomebuyers ar sensitive to any change in interest rates. diana olick has more for us. >> at aunday open house in

bethesda, maryland, homebuyers were taking advantage of warmer weather and lower mortgage rates. >> everything was falling into place and interest rates are going down and the weather is nice and we have houses to look at and people a excited. >> things were busy at this five bedroom colonial and while the supply of homes for sale is higher than last spring, the market is still very competitive. >> it seems like there are fewer houses on the market that armo affordable and it also seems that they would go very quickly, so within the first couple of weeks of showing. >> tan and her husband matthew want more space for their young family. >> see if we look at the upper end of our price range and it seems like there are more options and price i still clearly an issue and while the most markets are shrin the run-up over the last few years is dramatic and falling mortgage rates are not making up for it and the average 30-year fixed are justver 5% last november and began falling slowly. itdent to aro 4.5% in

february and then took a deep dive toward the end ofmarch, only to bounce back up a bit right after and it is still, however, lower than a year ago. >> people have been on a nice edge about whether they can afford a house and lower mortgage rates mean more buyers ect it's had an unusual e and almost no slack in the system because wages haven't kept up with home prices and people are having to borrow the money and when it gets easier to do that we see more buyers. >> that bethesda home went under contract in just a fewve days though it was on the higher end. more higher end homes are selling simply because there's more of them available. the good news is they're starting to focus on the entry level market. for "nightly business report," i'm diana olick. >> he is the chief economist at trulia. nice to see you. welcome. >> thanks for havinge. diana laid out the interest rate scenario and the way that interest rates affect how people buy their homes or whether they

buy a home.e what t of market are we in this spring? is it a buyer's market or still a seller's m we're still in a seller's market and we arey definit seeing signs of a gradual shift towards a buyer'sarket and we're seeing it in the most pronounced way in the most expensive market and they are hitting affordabilitynd ceilings first where we're seeing that is home sales that have started falling and not because fewer homes are being put on the market, but because homes are a harder time selling and we'reor seeing price cuts and we are seeing homes on the market longer and these are all telltale signs of a change in flavor toward a buyer's rket. >> but you have had an inventory problem for first-time buyers and not onough homes there for them to choose. is that starting to alleviate or not at this point? >> what we ie seeing inventory is starting to inch up especially the places that are

cooling off the most. g that's thed news. it does mean that buyers will have more places to g look at on the weekend and the bad news is it's not a greater flow of the market a it's not that there are new open houses each weekend andast week's open houses are showing up this weekt again becausy're not selling as easily. >> the other issue has been the cost of land and the cost of labor, so buildert are putting new houses regardless of whether it's the high end or th low market because they simply can't afford to do tt ory don't have the workers to build them. >> that's right. new conruction has not rebounded back to its levels 2000 yet. we are below hisric levels of construction and think of it this way, every new unit that mes on to the market, a new home or a home after someone passes away allow a trade-up buyer to move into th home a vacate their house which then

gets sold to anotherad up buyer and so forth and they can see changes and they meanev tha y new unit that comes on the market instigates the whole sequence of additional houses that come online and provide that inventor when newnits are missing we see overall inventory go down and including existing homes for sale. >> one last issue. property taxes aretaing to see their markets cool off because the demand is lower because the property taxes are not as deductible as they used to be, right? >> that's part of the issue, and it probably should go into the math that someone a who iut to buy a home makes. my guess,hough is the issue of the mortgage interest deduction having the lower cap now in property tax deduction isn't front and center on buyer's minds at least not as front and center arices themselves and the affordability concerns because these tax issues

into play two, three, four or five years down the line when people do their taxes and not at the moment of home purchase. >> thank you. aziz with trulia. >> my ndpleasure. >>oming up, the money game. a football pro tackles personal finance. ♪ ♪ we all know that spendingy moan be easy, but saving it can be difficult, even for adults. experts say one solution is financial education. it's a topic that sharon epperson is diving into tonight.

she has twor reports. he first takes us to a school in jersey city, new jersey, money areons about being taught at an early age ♪ ♪ >> hi, everyone! >> this sixth grade class in new jersey city, new jersey, may look like many other, but the subject is not science or english. >> who can tl me what direct deposit is? >> these 11 and 12-year-olds are learning about money and the baven of saving. >> you're writing that check and the money is coming outf ur account. >> i think you can get into a lot of debt due to credit cards and i was thinking cash, too. >> and the cost of borrowing. >> interest. i asked tm questio about it, and she'll answer and i'm, like, oh. s >> some arering what they learned with their parents. >> i pay more attention to what they purchase and what i purchase, as well. >> and finding out for themselves how to secureheir own financial future. >> it's something that has to stick with you for the rest of

your life. it's something that helps you. >> new jersey had some financial education standards in place, but a new law that goes into effect in september is taking those benchmarks a step further, requiring all school districts to teach financial literacy in sixth, seventh and eighth grade, including topics this public school alreadyovers. >> most states have financial education standards in high school and a recent report by the brookings institutionas einancial education standard including mid school. it is essential to start teaching at a younger age so that young people will be able tohe better manage money as adults. >> this is very important to have it taught in sc>>ol. new jersey assembly woman angela being in knigh who co-sponsored the bill which is now law questions skeptics whether financial literacy can be taught in the classroom. >> this is a life school you do not forget a life skill. >> danielle agrees and looks

forward to infusing financial education into her curriculum and having more teachers across the state do the same. >> i tell my kids all of the time i wish i had a teacher when i wasid ine school who prepped me the way they're being preppe d >> and i wng really, really well and not a lot of schools teach, this courseso they're ahead of the game. >> for "nightly bus report," i'm sharon epperson in jersey city, newse j >> now to a professor who is a believe if player and nfl linebacker brandon copeland is no stranger to success and off the field he plays it safe with his money andn as s reports he's teachingdo others t the same. ♪ ♪ >> on the field, brandon copeland playso win. off the field, he's changing the game. >>ashe conversation changed from what do i have now to how can i use what i have now so i

don't ha to depend on anyone else to give me aor paycheck the rest of my life. >> a baltimore native, copeland grew up surrounded by the sport. his grandfather, r hillkin spent 11 years in the nfl. for copeland, football came naturally, but it was the he developed in the classroom that really paved the way. >> my grandfather made it cool for me to be smart, bed educate pushed to get as and bs. and it was that ethic that landed him at one of the most prestigious high schools around. >> i was fortunate to go to a highchool calle gilman in baltimore and the head coach of my football team, he ran his own hedge fund, but as a young kid o didn't what he did and had no idea, and i just knew that he was pretty well off andmm one suer i went to work from him, and one summer that would shape his future love of finance and understanding to how to take it one his ticket to financial

freedom, an ideology he ine-tuned when he attended the prestigious wharton school of business at the university of pennsylvania. >> when you are with your teammates high school and college and even now do they talk about money and the importance of underst ding how to manage their own money. >> the common denominator of most people in this world is we all talk about money, right? m as's what we d successful and unsuccessful and the biggest money lesson i learned isly basic don't try to keep up with the joneses. if that's not something of value to you then don't chase it. >> it's that lesson that copeland wanted to share with others and a bas conversation out money that he said many ste not being taught, even at the highe levels. so he reached out to his alma mater. he is now known at upenn as coke. >> the premise of the class is to talk about stuff that you will actuallyse in your lifetime, right? and my goal is that you don't

come tohat decisions for the first time and you're trying to learn on the fly. >> the course focuses on everyday finaes, likeow to budget yourself on your salary. the basics, really. he co-teaches the class with dr. peterson. >> i knew the tension of a 45-degree angle and m personally, i don't plan on using it, if i have to use it i'll break out a ti 84 or the answer and we have the camera so y s just us mack a lot of money and then you see us lose it, but if you've never been taught how to buet and you' never practiced that, and you give a 21-year-old kid a millio bucks and you say good luck. don't loseit. and they'll talk i'm going to buy t gs or i'mng to get this and it's more about what you invest in. now your conversations with the teammates aren't more about what you're going to get, a lesson in life he hopes will help others

change their financialame. for "nightly business report" i'm sharon epperson in philelphia. >>t's financial literacy awareness month andhi one we've always learn side it's never too late to start. >> absolutely. >> if you can get started tomorrow, get are the staed. >> thank you for watching this special edition of "nightly business report." i'm sue herera. >> i'm bill griffith. have a great weekend, and we will see you again on monday

>> this is "bbc world news america." >> funding of this presentation is made possible by the freeman foundation, and judy and peter blum-kovler foundation, pursuing solutions for america's neglected needs. >> wow, that is unbelievable. ♪ >> i'm flyi ♪