Test your knowledge

Choose wisely. There is only one correct answer to each question.

Keep studying!

Review your answers below to learn more.

Why does budgeting still matter after you have stopped saving for retirement?

You may need to adjust your spending rate at times during retirement.

You need to continue saving money for retirement even when you're retired.

You should pinch pennies during retirement.

It doesn't matter, actually.

You may need to adjust your spending rate at times during retirement. Especially during market downturns.

Once you're retired, you won't need to adjust your spending rate.

True

False

False. Market downturns and unexpected expenses can necessitate adjusting your spending rate.

Which statement is false?

By quantifying each of your goals, you may find that it is not possible to achieve them all

Each goal likely carries its own time horizon, which in turn will dictate what types of investments you hold and where

Once you've set your baseline goals and quantified how much they'll cost, checking your progress toward them can serve as the ultimate financial checkup

By quantifying each of your goals, you may find that it is not possible to achieve them all. But it's better to know that early on, so you can prioritize.

For saving for your long-term goals, advisors usually recommend starting out with stocks and holding them over the long term rather than switching eventually to safer investments.

True

False

False. Advisors usually recommend shifting to safer investments over time in order to protect the wealth you have built up.

What types of activities form the base of the investment pyramid?

The most important activities for investment success

The least important activities for investment success

Broccoli and brown rice

The most important activities for investment success. The other parts will depend on these.