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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.
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.
3.
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.
4.
It is possible to have your employer add its own money to a retirement account.
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True. If you have a 401k plan, your employer might make contributions to it on your behalf. This is one reason 401k plans are so popular.
5.
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.