Choose wisely. There is only one correct answer to each question.
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1.
What's a fair figure to use as an expected return for bonds?
5% per year. Intermediate-term bonds have returned 5% per year, on average, since 1926, according to Morningstar.
2.
When the Social Security Administration sends you your personal Social Security Statement, your estimated benefits will be stated in _______.
Today's dollars. Your benefits will be stated in today's dollars, per month. However, Social Security benefits rise with inflation; therefore, they will likely be higher when you finally retire.
3.
When planning for retirement, compare your expected pension and Social Security income with the amount of income you think you'll need. Then determine whether your current investments will cover the difference between the two figures.
True. This is a good place to start.
4.
You can receive Social Security benefits before you reach your full retirement age.
True. You can, although they will be diminished.
5.
When calculating expected returns for stocks, what number would be fairest to use?
10% per year. Though stocks have sometimes performed better during past periods, we recommend a more conservative number--the roughly 10% per year that stocks have returned since 1926.
