Retirement Plans and Employment Benefits

Retirement is what type of wealth building?

• Long-Term
• Short-Term

When should you start putting money away for retirement?

• As soon as possible
• Never
• When you are 50.
• Whenever you feel like it.  

Assume you are 22 years old, have up to $5,000 to invest annually toward retirement. However, your employer is not providing a match or a retirement plan. Select the best financial product for you.

• Roth IRA

• 401K or Company matching plan

• Savings account

• Car

A retirement savings plan offered by a corporation to its employees; the employee contributes money from his/her gross pay, and the money grows tax deferred. The company will often match to a certain percentage.

• IRA

• 401(k)

• Share

• Mutual Fund

Most IRAs are invested in

• stocks.

• bonds.

• gold and silver.

• mutual funds.

Which of the following is a characteristic of a Roth IRA?

• Money invested into a Roth is “after-tax” dollars

• Money is deposited into a Roth by your employer.

• Money invested into a Roth is “before-tax” dollars.

• Once money is deposited into a Roth IRA, it cannot be taken out until retirement.

A type of IRA; contributions are NOT tax deductible, but earnings and withdrawals are tax free

• Roth IRA

• distribution

• mutual fund

• actuary

In most situations it is okay to take money out of your retirement account to buy a car or something that you really want.

• True

• False

Bob starts saving $500 a month for retirement at age 25. Ron starts saving $500 a month for retirement at age 40. Who is most likely going to be able to retire earlier?

• Ron

• They are likely going to have to both work until they are 99.

• Bob

• They could both retire tomorrow.

If your company has a retirement plan,

• you can wait until you are in your 40s to start participating without any costs.

• you should sign up as soon as possible so your investment will start growing.

• only people who plan on retiring early need to participate in the company plan.

• you should wait until your bills are paid before saving money for retirement.