Saving, Investing & Retirement

As a young person, saving for your retirement is an example of a ________________ goal.

• short-term

• medium-term

• value-added

• long-term

When planning for retirement, you need to determine

• how much money you need to live in a nursing home or retirement center.

• how much money you want your children to inherit.

• how much money you will need and how many years you will need it.

• where you plan to live after you quit working.

Most people plan to work

• more years than they actually do

• until they are 60 years of age.

• only until they qualify for their company retirement.

• until they are fired or forced to retire.

Which of the following statements about Social Security is the MOST accurate?

• Even if you do not start saving and planning for retirement, you will earn enough money from Social Security to maintain your current lifestyle.

• Social Security was originally designed to be a supplemental income for people over the age of 65.

• Because Social Security is a government program, it is guaranteed to be there when you retire.

• The average income from Social Security is about $40,000.

Why do people invest when risk is involved?

• Because they do not understand that investing is risky.

• Because the talk about risk is really overstated; investing is a safe bet.

• Because the potential to make money is greater than the risk of losing it.

• Because they are greedy and believe they can beat the odds to become a millionaire.

The potential risk that you will lose your money due to a company going bankrupt is called _______________ risk.

• market

• fraud

• corporate

• financial

If you are concerned about your investment losing money instead of appreciating, then you are worried about ______________ risk.

• market

• inflation

• fraud

• financial

A company sponsored plan where you determine how to invest your money is called a(n)

• annuity.

• IRA.

• pension plan.

• 401(k) plan.

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.

The risk that you have been tricked or deceived when making an investment is called

• market price risk.

• financial risk.

• fraud risk.

• inflation risk.