As Graduation Approaches, Finances Become Paramount

By Rebekah Tsadik The Daily Northwestern 

Sometime between New Student Week and Commencement, Northwestern students prepare to enter the work force, weighing their options for salaries and locations against student loans and proximity to friends and family.

Retirement planning usually takes a back seat to more immediate needs.

According to a study from Boston-based Fidelity Investments and Richard Day Research of Evanston, employees in the public sector save significantly less for retirement than those in the private sector with comparable incomes. Corporate-level employees saved an average of $62,000, which is 23 percent more than their peers in the tax-exempt sector.

But NU students have few opportunities to learn about retirement planning.

"We have one workshop that we offer on how to understand and plan for compensation and benefits," said Lonnie Dunlap, director of University Career Services.

The workshop is part of a series that combines the efforts of offices such as Multicultural Student Affairs and Counseling and Psychological Services to create life-preparation workshops during Spring Quarter. Last year, a specialist from a private company talked about understanding benefits and compensation in new job positions, a complicated topic.

"We encourage (students) to really do their research based on their own needs," Dunlap said.

Last year's graduating class entered diverse fields in both the private and public sectors. The majority, 40 percent, went into management, business, consulting, finance and sales, Dunlap said. Twelve percent of the students entered the communications, journalism and media fields, while 11 percent of students entered education or teaching.

"I haven't honestly thought about retirement," said Rachel Patten, a SESP junior. "I think it's just more important for me to do something that I'm the most passionate about."

Students often seek jobs with personal and professional rewards, Dunlap said.

The study found that 42 percent of tax-exempt employees left the corporate world for better work-life balance, less stress, to make a more positive impact, and for greater job security. Ninety percent reported overall satisfaction with their current occupations.

Experts say no matter what students do, they should start saving early.

"Upon entering the work force, enroll in your workplace retirement plan, if one is offered, and be sure to contribute at least the amount of the employer match," said Jennifer Engle, a Fidelity spokeswoman. "Saving even a small amount over time will increase your chances of enjoying a financially secure retirement."

But graduate study, another option many students pursue in the years after graduation, may delay thoughts of retirement even longer.

SESP senior Genna Cohen plans to attend graduate school after working in the health policy sector. She is interviewing for jobs mostly in the private sector. Retirement is a general concern, but not necessarily with her first job, she said.

"(Retirement) is definitely something I'm considering," she said.

Other students look to their parents for investing and retirement guidance.

SESP junior Blair Schwab's mom created a retirement account for her two years ago and encouraged her to contribute to it regularly. Schwab said she would opt for a job with better retirement and health benefits if she had to choose between two similar jobs but said it's hard to worry about those types of considerations now.

"The time seems so far away and it's just not something that's at the forefront of recent graduates' minds," she said.

Reach Rebekah Tsadik at r-tsadik@northwestern.edu.