Exam 15: Retirement Planning

Lucius starts saving $100 per month at age 25 and averages 6% per year compounded monthly.Hector starts saving $1,215.22 per month at age 55 and averages 6% per year compounded monthly.Who will be better off at age 65 assuming neither had in money in their account when they started?

What are some very important things to monitor concerning your retirement plan,both before and after retirement?

Relate the 7 steps to funding your retirement needs.What is the hardest part?

If you are self-employed or work for a small business which of the following retirement plans would you be most likely to have?

When planning the retirement payout,there are several options from which to choose.With the ________ option the annuity provides payments over the life of both you and your spouse.

Under a defined-contribution plan,your employer alone or you and your employer together contribute directly to an individual account set aside specifically for you.

Robin was born after 1960,therefore,the retirement age for her to receive full Social Security benefits is 65.

Individual retirement arrangements (IRAs)are personal savings accounts that give you tax advantages for saving for retirement.

What is a disadvantage of the "Prepaid College Tuition Plan" version of the 529 plan?

The big disadvantage with a defined-contribution plan is that you don't know in advance exactly how much money you can plan on for retirement income.

________ of workers feel confident they will have enough money to live comfortably in retirement,only ________ have actually tried to calculate how much they will need when in retirement.

A(n)________ retirement plan is one in which the company will contribute shares of company stock into the employee's account in place of a cash contribution.The employee does well if the company stock appreciates in value,but can suffer dramatically if the stock depreciates in value.

Which of the following benefits is not provided by Social Security?

Jahwana works for a large corporation with a 401(k)retirement plan.The company matches dollar for dollar the first 5% of the employee's salary contributed to the 401(k).Jahwana currently earns $40,000 in gross salary and she currently contributes 15% of her salary into her 401(k).How much money in dollars is the total contribution to her account every year?

The difference between a Money Purchase Plan and a Profit Sharing plan is that

Why is it a wise idea to have 3 retirement plans in place?

According to the author,401(k)plans are actually do it yourself variation of a profit-sharing/thrift plan.

How will you access in an accurate manner the amount of your retirement income?

A 401(k)plan is a tax-deferred retirement savings plan in which employees of private corporations may contribute a portion of their wages up to a maximum amount set by law.

Social Security benefits are very nice to get and help many current retirees live above the poverty line.Why should someone who is 25 years old today not count on receiving the same type of Social Security benefits when they retire in 45 years from now?