U5 Quizziz

What is a: Defined Benefit Plans

(such as Pension Plans)

• Employers promise employees
  a specific monthly benefit at
  retirement. The benefit may
  be a fixed dollar amount or
  may depend on a plan formula
  that considers factors like
  salary and years of service.

• Employees and/or employers
  contribute money to the account.
  Upon retirement, employees
  receive the balance of the account,
  which depends on contributions
  plus or minus investment gains or
  losses.

• Employee contributions
  to the plan are tax-
  deferred. Any earnings
  from the investments
  are tax-deferred. You pay
  taxes on the contributions
  and the earnings when
  savings are withdrawn.

• Employee contributions
  to the plan are not tax-
  deferred. Income earned
  on the account (from
  interest, dividends, or
  capital gains)
  is tax-free.

Defined Contribution Plans
(such as 401(k) Plans)

• Employers promise employees
  a specific monthly benefit at
  retirement. The benefit may
  be a fixed dollar amount or
  may depend on a plan formula
  that considers factors like
  salary and years of service.

• Employees and/or employers
  contribute money to the account.
  Upon retirement, employees
  receive the balance of the account,
  which depends on contributions
  plus or minus investment gains or
  losses.

• Employee contributions
  to the plan are tax-
  deferred. Any earnings
  from the investments
  are tax-deferred. You pay
  taxes on the contributions
  and the earnings when
  savings are withdrawn.

• Employee contributions
  to the plan are not tax-
  deferred. Income earned
  on the account (from
  interest, dividends, or
  capital gains)
  is tax-free.

Traditional IRA

• Employers promise employees
  a specific monthly benefit at
  retirement. The benefit may
  be a fixed dollar amount or
  may depend on a plan formula
  that considers factors like
  salary and years of service.

• Employees and/or employers
  contribute money to the account.
  Upon retirement, employees
  receive the balance of the account,
  which depends on contributions
  plus or minus investment gains or
  losses.

• Employee contributions
  to the plan are tax-
  deferred. Any earnings
  from the investments
  are tax-deferred. You pay
  taxes on the contributions
  and the earnings when
  savings are withdrawn.

• Employee contributions
  to the plan are not tax-
  deferred. Income earned
  on the account (from
  interest, dividends, or
  capital gains)
  is tax-free.

Roth IRA

• Employers promise employees
  a specific monthly benefit at
  retirement. The benefit may
  be a fixed dollar amount or
  may depend on a plan formula
  that considers factors like
  salary and years of service.

• Employees and/or employers
  contribute money to the account.
  Upon retirement, employees
  receive the balance of the account,
  which depends on contributions
  plus or minus investment gains or
  losses.

• Employee contributions
  to the plan are tax-
  deferred. Any earnings
  from the investments
  are tax-deferred. You pay
  taxes on the contributions
  and the earnings when
  savings are withdrawn.

• Employee contributions
  to the plan are not tax-
  deferred. Income earned
  on the account (from
  interest, dividends, or
  capital gains)
  is tax-free.

Which of these offer the highest rate of return:

• Government Bonds

• Savings Accounts

• Mutual Funds

• Certificates of Deposit (CDS)

Which of these options are riskier Bonds and Certificates (CDS), but offer a higher rate of return.

• Cash

• Stocks

• Savings

• Money Market Account

Do corporate stocks have a:

• High risk but also high rate of return:

• Low risk but low rate of return

Which of these statements are FALSE

• Mutual Funds have a Higher Risk/ Rate of return then Bonds

• Mutual Funds have a Lower risk/Rate of return then corporate stocks

• Mutual Funds have a higher risk/rate of return then corporate stocks

• Mutual Funds have a Higher Risk/Rate of return then Certificates of Deposit (CDS)

Which investment does this description match:

Relatively low risk because the
   investment is FDIC insured
• Relatively low potential rate of
   return; the longer the money is
   invested, the higher the rate of
   return
• Relatively low liquidity because
   a penalty must be paid if money
   is withdrawn early

• Mutual Funds

• Stocks

• Corporate Bonds

• Certificates of Deposit

Which of these options match this description:

Your money is combined with money
   from other investors to buy a variety
   of investments.
• Your money is not insured, but
   diversification reduces the risk of
   loss.

• Money Market Account

• Mutual Funds

• Government Bonds

• Certificates of Deposit (CDS)