Personal Finance week 16

The _____________________ is the central bank of the United States and sets interest rates, which can have an effect on how much interest is earned from 401k's and other investments.

Federal Reserve Bank

Choose all practical ways a person can plan and prepare for retirement.

If self-employed, invest in IRAs or other diversified investments. Know what Social Security may provide in retirement. Participate in your employer's pension or savings plan to save on taxes. Evaluate how much income you will need to support you in retirement. Start saving for retirement when you are younger.

According to Ron Blue, what are the three things to consider when calculating the amount needed for retirement?

Income Debt Lifestyle

If an employee withdraws money from retirement savings early, the employee could ________________________. Choose the best answer.

lose interest, principal, and tax benefits and may have to pay penalties

What are the 5 principles Ron Blue suggests that you follow to choose a successful financial advisor?

Knowing how the advisor is compensated Knowing the advisor's professional competencies Do they practice what they preach Will they give you character or client references Know the advisor's worldview

When did Social Security go into effect?

in 1935, with the signing of the Social Security Act

Typically, state governments determine the ___________ taxes that businesses pay (or if they pay one at all). This can affect the market of an area in a positive or negative way.

income

Romans 13:1 says "Let every person be subject to the ____________ authorities. For there is no authority except from God, and those that exist have been instituted by God."

governing

The _____________ determines which expenses are tax-deductible, which can greatly impact personal planning in your finances.

government

Social Security benefits replace about _________ of an average wage earner's income after retiring. Most financial advisors say retirees need about _________ of their pre-retirement earnings in order to live at a comfortable level.

40%, 70%

Every Social Security dollar collected in taxes goes to a trust fund that pays monthly benefits to retirees and their families and to the disabled and their families. What are the percentages for each group?

85% for retiree benefits and 15% for disability benefits

What two reasons cause consumers to have trouble with investing and saving?

People want immediate gratification instead of long-term gains. People are financially illiterate.

Choose all the people listed below who could receive benefits from Social Security.

a spouse of someone who receives Social Security benefits a child whose father died before retirement a dependent parent of a worker who died a person with a disability who cannot work a retired worker

Diversification in stocks is a principle of investing which recommends that investors ________________________________.

choose from several investment options, thereby not concentrating all their wealth into just one stock or investment

One of the important roles of government is to regulate businesses while promoting what among businesses?

competition

Generally, defined contribution plans require employees to ____________________________.

contribute in order to establish these kinds of retirement plans

A monopoly is when a company and its product offerings dominate a sector or industry, and is completely legal.

false

For defined contribution plans you can expect ____________________________.

no exact guarantee of payout

Choose all accounts that are considered savings accounts.

passbook savings account checking account certificates of deposit

Besides Social Security, most financial advisors would tell you that you also need what three other means for living comfortably in retirement?

private pensions personal savings investments

Choose all financial products that are considered investments.

real estate stocks commodities bonds mutual funds

Saving and investing your money is a level of _________________, and it honors God because it rightly values money as a gift he has given us. James 1:16-17 says, "Do not be deceived, my beloved brothers. Every good gift and every perfect gift is from above." Correct!

stewardship

In order to be healthy financially, everyone should have enough in savings to cover expenses for ____________ in case of job loss or another emergency.

three months

Where does the tax revenue collected from Social Security deductions from payrolls go?

to people currently receiving Social Security benefits