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Financial Planning Courses: Retirement

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1.
Over a long period, inflation reduces what a person with a fixed income can afford to buy.
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True. Financial planners suggest that you begin saving for retirement as early as possible to offset the effects of inflation.
2.
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.
3.
Long time horizons generally enable us to assume _______ short-term ones.
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More risk than. Time reduces risk.
4.
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.
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.