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Portfolios 102: Determining Retirement Needs

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1.
Once retired, you will not need to pay taxes.
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False. In most cases, you will continue to have to pay taxes.
2.
Your list of expenses for retirement should leave room for taxes.
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True. You want to be prepared at tax time.
3.
Many professionals in the retirement field believe that you will need about two-thirds of your pre-retirement income to survive in retirement.
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True. Estimates vary, but two-thirds is commonly accepted.
4.
A defined contribution plan provides you a lump sum of money at retirement.
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True. If you like, you can use this money as retirement income that is steadily spread out.
5.
When calculating the expenses you will have during retirement, you should calculate them using _______.
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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.