Choose wisely. There is only one correct answer to each question.
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1.
If you find that your portfolio is not on track and you plan to retire in just two years, which typically should not be an option?
Tweaking your portfolio so that it's more aggressive. You should generally get more aggressive only if your retirement is far enough away--say, 10 or more years off. Otherwise, you may be taking too much risk.
2.
To find out whether your retirement portfolio is on track, _______.
Determine what your regular retirement income will be, excluding your income from your own savings. Since savings is much less predictable, you can instead focus on what your regular retirement income -- Social Security and your retirement plans -- will be.
3.
When calculating expected returns for stocks, what number would be fairest to use?
10% per year. Though stocks have sometimes performed better during past periods, we recommend a more conservative number--the roughly 10% per year that stocks have returned since 1926.
4.
How often should you reevaluate whether your portfolio is on track to meet your retirement needs?
Every few years. You don't need to go through this exercise each time you take a look at or rebalance your portfolio, but it's a good idea to run through the numbers every few years so that you're not caught by surprise when retirement comes.
5.
What's a fair figure to use as an expected return for bonds?
5% per year. Intermediate-term bonds have returned 5% per year, on average, since 1926, according to Morningstar.