Retirement Planning

​The Importance of Saving for Retirement

​Economics and Personal Finance

​Use this graph to answer the following four questions.

Economics and Personal Finance​

Retirement Planning​

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​Most people in America fail to save enough for retirement.

Economics and Personal Finance​

Retirement Planning​

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Why do you think it is important to save for retirement?

(Explain in a minimum of 3 full sentences.)

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When do you plan on retiring?

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How much money do you think you will need to retire comfortably?

​Directions:

Read the following article and answer the questions.

Economics and Personal Finance​

Retirement Planning​

importance.pdf - Google Drive

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When should you start learning and thinking about saving for retirement?

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What is one of the most important savings goals you should have as an adult?

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What percent of Americans have less than $5000 saved for retirement?

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What don't most people realize about retirement?

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What is the average age people retire?

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What percent of people retire earlier than expected? Why?

page 2 of inve.pdf - Google Drive

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Why do many people fail to save for retirement?

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Why is it easier to save enough to retire when you are younger?

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Why do not many people make saving for retirement a priority?

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What should you not do if you have debt or low wages?

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What do many people count on to pay the bills for retirement?

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What amount of your income is Social Security designed to replace?

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What is expected to happen to Social Security by 2034?

page 3 of inve.pdf - Google Drive

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What are four common types of retirement savings plans?

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What are all retirement savings plans designed to help you do?

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With a 401k plan, who determines how much to place in your account?

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Why is the 401k plan an easy way to save for the future?

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What break does the 401k plan give you?

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What do you not pay taxes on as long a you keep your money in a 401k plan?

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What may an employer offer to employees with a 401k plan?

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What are two restrictions placed on 401k plans?

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Who is allowed to use a 403b retirement plan?

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What is the benefit of the 403b plan?

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What does IRA stand for?

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What are the two tax advantages or benefits of a traditional IRA?

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What does tax deferred mean?

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What happens if you withdraw your money from an IRA before the age of 59 ½?

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How are the Roth contributions treated in regard to taxes?

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What is an enormous advantage of a Roth IRA?

page 5 of inve.pdf - Google Drive

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What are the four common retirement accounts?

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What is the difference between who is eligible for a 401k and a 403b?

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Which plan is high income earners not eligible to use?

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What three retirement savings plans have contributions made that are

tax-deducible?

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Which retirement savings plan has tax-free earnings and withdraws that are tax-free?

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Which plans do earnings in the account grow on a tax-deferred basis?

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Which plan do employers often match a percentage of an employee’s contribution?

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What occurs if you withdraw money earlier, before the age 59 ½, from a 403b, 401k, or traditional IRA?

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What is the maximum contribution to a 401k and 403b plan?

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What is the maximum contribution for traditional IRA and a Roth IRA?

Multiple Choice

When should you start learning and thinking about retirement?

• At the age of 45

• When you are married

• Now

• When you have a serious career

Multiple Choice

A majority of adults in the U.S. have--

• saved too much for retirement

• not saved enough for retirement

• saved the correct amount

Multiple Choice

What statement is true about retirement in the U.S.?

• The average age of retirement is 63.

• Over 55% of retirees retired earlier than

  expected.

• Most Americans don’t have enough saved

  for retirement.

• All of the above are true.

Multiple Choice

What is the advantage of starting to save for retirement when you are young?

• You can avoid inflation.

• Parents can save for you.

• Your money will grow quickly from compounded returns.

Multiple Choice

The reason why so many people fail to save enough for retirement is because--

• they procrastinate.

• don't make savings a habit or priority.

• depend on Social Security.

• of all three of these answer choices.

Multiple Choice

For all working adults, saving for retirement--

• should be done by the government and the Social Security system.

• should be a priority.

• should only be done when you have no debt

Multiple Choice

The recommended amount a person should save for retirement is--

• 1% of their income

• 10% of their income

• 15% of their income

• 50% of their income

Multiple Choice

When you retire, Social Security--

• will replace 90% of your income.

• will fund your retirement completely.

• will replace 40% of income.

Multiple Choice

An example of a retirement saving plan is--

• 401(k) and 403(b)

• Roth

• IRA

• All of the above are retirement savings plans.

Multiple Choice

The different retirement savings plans are--

• designed to help grow your savings

• has certain tax advantages

• allows you to invest your savings in a mutual funds, bonds, or other types of investments

• All of the above

Multiple Choice

Another significant advantage of the 401k plan is that your employer may--

• give you all your money before you are 50.

• offer to match a portion of what you save.

• invest your money for you.

Multiple Choice

The main difference between a 403b and 401k plan, is that a 403b is used by--

• nonprofit and religious groups, public schools, and governmental organizations

• private companies

• banks

Multiple Choice

A traditional IRA and a Roth IRA are--

• individual recreational accounts for college

• individual retirement accounts that you open.

• retirement accounts opened and controlled

  by your employer.

Multiple Choice

A big advantage of a Roth IRA over a traditional IRA is that your investments--

• grow tax-free and are never taxed.

• are tax deferred; you don’t pay taxes until

  you withdraw the money.

• are taxed at a flat rate of 20 percent

​End of Lesson

​Economics and Personal Finance