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Financial Planning Courses: Retirement

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1.
Retirees will always need less money to live on than working people.
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False. Health problems and lifestyle changes may increase a person's income needs in retirement.
2.
When you start saving for retirement early, you can ride out the various risks in the market better than you could if you started late.
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True. A long time horizon ultimately smooths out the effects of risk.
3.
Social Security benefits are based on _______.
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Average lifetime earnings. Social Security benefits are based on average lifetime earnings and the amount of time you've worked.
4.
Inflation risk, which is the risk that rising prices will erode your money's purchasing power, is a challenge for retired people because _______.
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They usually live on a fixed income. Fixed incomes don't change, so when prices rise, that affects the purchasing power of retired people's money.
5.
Which type of retirement account would you set up and manage on your own?
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Individual retirement account. IRAs are accounts for individuals and are typically not related to one's job.