Choose wisely. There is only one correct answer to each question.
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1.
To pay yourself first means to _______.
Set aside money right away out of your paycheck. The idea is that your savings come first.
2.
In the language of retirement plans, the term "pre-tax" means that _______.
Money contributed to the plan is not to be taxed in the current year (until withdrawn). "Pre-tax" means that it is meant to not be taxed currently.
3.
An advantage of keeping money in a tax-deferred retirement plan is that you might pay lower taxes on the money when you eventually take it out. This is because _______.
You may be in a lower tax bracket in retirement. Most retirees take in less income in retirement, which typically puts them into a lower tax bracket. This is not a given for everyone, though.
4.
A good budget can sometimes allow a months expenses to exceed that months income.
True. A good budget is always balanced, even if some months expenses exceed income, as long as there are adequate inflows from past or future savings.
5.
Saving tiny amounts of money periodically is a nice idea, but is not practical.
False. Saving small amounts periodically can be done by setting them aside and putting them into a savings or investment account, and they can grow substantially over many years.