Exam 18: Starting Early: Retirement Planning

Too many people make the move to change housing during retirement without doing enough research.

One of the misconceptions about retirement is that your expenses will drop when you retire.

Saving money doesn't come naturally to many young people.

What happens to your Social Security income if you retire early at age 62 instead of 65?

Jasmine Smith owns a condo worth $260,000,a car valued at $25,000,and miscellaneous assets worth $7,500.Her retirement account,in which she is fully vested,contains $27,500 in mutual funds.Her net worth is $165,000.What are her total liabilities?

Janice Jacobs is planning for her retirement.She knows what assets and liabilities she has now and expects to have in the future.She knows what her spending patterns are likely to be and adjusted them for inflation.She also has identified all of her sources of income after she retires.Now she is sitting down and planning her income and expenses each month.After she has finished this plan,she knows that she has enough income to cover her expected expenses and still have $200 extra each month for emergencies and other unplanned activities.Even with inflation,she thinks she can sustain this plan for approximately 30 years.What step in the retirement planning process is Janice completing?

Most people can qualify for reduced Social Security retirement benefits at age 62.

Your first step in retirement planning is to:

The potential loss of buying power due to inflation is what makes it so important to plan ahead for your retirement.

What types of expenses may be lowered or eliminated during retirement?

A joint-and-survivor annuity pays its installments until the death of the last designated survivor.

Your right to at least a portion of the benefits you have accrued under an employer pension plan is called:

The Social Security Administration estimates that what percent of individuals age 65 and older would live in poverty without Social Security benefits?

Under a 401(k)plan,your employer makes nontaxable contributions to the plan for your benefit and reduces your salary by the same amounts.

Which of the following is a feature of an Education IRA?

With a defined-contribution plan,the plan document specifies the benefits promised to the employee at the normal retirement age.

Over the last two decades,the defined-benefit plan has continued to grow rapidly while the number of defined-contribution plans has generally dropped.

The rate of return on annuities is rarely tied to market rates.

An annuity in which payments stop when you die,whether a month or many years after the payout begins is called:

Which type of annuity gives more income per dollar of outlay than any other type?