Retirement and Budgeting Quiz

Which of the following are TRUE about gross income and net income?

• They are the same thing

• Gross income is the total amount earned AFTER deductions

• Gross income is the total amount earned BEFORE deductions

• Net income is the total amount earned BEFORE deductions

According to a rule of thumb, rent shouldn't take up more than ___ % of your take-home pay.

• 7-12%

• 10-15%

• 15-20%

• 25-30%

Which of the following is a step you can take to mitigate the risk of buying a used car?

• Get a vehicle history report

• Have a mechanic inspect the car after you buy it

• Skip the test drive; you have time after you buy it to drive

• Buy a more expensive vehicle to ensure quality

A 18oz box of cereal costs $4.99. How would you calculate the unit price?

• 18oz / $4.99

• 9 oz / $2.50

• $4.99 / 18oz

• (18oz) x ($4.99)

Tax-deferred means...

• You do not have to pay income tax on the money until you begin to withdraw it at retirement

• You pay income tax on the retirement contributions when you deposit them

If you leave a company before the required minimum of years to retain your pension, what happens to the money?

• You receive 1/2 of it when you leave the company

• You receive 1/3 of it when you leave the company

• You receive all of the money and can roll it into your new retirement plan

• You don't receive any of the money

Federal insurance program which provides benefits to retired individuals or those who are unemployed or disabled

• Pension

• Social Security

• 401k

• Certification of Deposit (CD)

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

• short-term

• medium-term

• value-added

• long-term

Which of these accounts do you set up at a brokerage firm or other financial institution?

• 401K

• Pension

• Individual Retirement Account

What account is a good idea if you are in a lower tax bracket than you will be at retirement?

• Traditional IRA

• Roth IRA