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Financial Planning Courses: Retirement

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1.
Why would a 60-year-old feel more urgency about planning for retirement than a 20-year-old would?
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A 60-year-old has less time to build up a nest egg. This is what creates the sense of urgency.
2.
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.
3.
Social Security benefits are based on financial need.
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False. Anyone who pays Social Security taxes can collect Social Security benefits if they have enough credits.
4.
The government has done its part to help you save for retirement by _______.
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Allowing you to set up tax-deferred retirement accounts. Accounts such as 401(k) plans and individual retirement accounts (IRAs) grow tax-deferred.
5.
Many retirement plans are tax-deferred. What does tax-deferred mean?
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The earnings that build up in them are not taxed until you start making withdrawals. This enables your retirement plan to grow more every year.