Choose wisely. There is only one correct answer to each question.
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1.
When calculating the expenses you will have during retirement, you should calculate them using _______.
Inflation-adjusted dollars. Prices rise over time due to inflation; you must therefore adjust your expenses for inflation. An inflation table factor or a financial calculator can help you do that.
2.
Many professionals in the retirement field believe that you will need about two-thirds of your pre-retirement income to survive in retirement.
True. Estimates vary, but two-thirds is commonly accepted.
3.
Which of the following will you probably not need to cover during your retirement years?
Savings for the future. This is not needed because you are already retired, although it is certainly optional. You will continue to have expenses and taxes of various kinds, however.
4.
A defined contribution plan provides you _______ at retirement.
A lump sum of money. You are given a lump sum of money, but you can convert it into an annuity if you wish.
5.
Your expenses in retirement will be the same amount that they are today.
False. While you will have the same kinds of expenses, the amounts will shift.
