Financial Literacy Simulation in Managerial Finance: Signing Up for a Mock 401(k)

Abstract

Much evidence suggests a growing need for financial literacy as a prerequisite to a lifetime of financial well-being. And while it has been recommended that U.S. colleges and universities implement a mandatory financial literacy course (President’s Advisory Council on Financial Literacy, 2009; U.S. Financial Literacy and Education Commission, 2019), no such requirement has been imposed. Currently, only one quarter of college students report access to financial literacy education (Montalto et al, 2019). Guided by best practices and insights, this paper examines the opportunity for an upper-division core business course to support a focused, financial literacy learning opportunity for upper classmates by employing a simulated retirement plan enrollment. This work contributes to the body of work on financial literacy education and represents an efficient approach to providing relevant education to meet the growing financial literacy needs of college students.