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1.
Before you retire, you must cover your current expenses, your taxes, and savings for future needs. In retirement, however, what will you need to cover?
Only current expenses and taxes. Saving for the future is not necessary, although some people do it for extra income.
2.
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.
3.
By examining your present mode of living and making adjustments, you can determine your retirement needs.
True. By looking at your present lifestyle, you can determine what you will need to live on in retirement.
4.
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.
5.
Your list of expenses for retirement should leave room for taxes.
