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Financial Planning Courses: Retirement

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1.
When prices of goods and services rise over time and eat into your money's purchasing power, that is called _______ risk.
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Inflation. Inflation risk is the risk that rising prices will make it harder to buy the things you need.
2.
Social Security benefits are based on the best 10 years of your lifetime earnings.
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False. Social Security retirement benefits are based upon your lifetime earnings recorded with the Social Security Administration.
3.
If you work for a for-profit company, which retirement plan might it offer?
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401k. If a for-profit company offered a retirement plan, it would offer 401k plans, but not the others mentioned.
4.
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.
5.
When calculating your future retirement income needs, you must consider inflation.
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True. After you have adjusted for inflation, you will have a true picture of the amount of income available for living purposes.