Finance Chapter 1 Part 4

Taxable incomes

- Active, or ordinary income -passive income -Portfolio, or investment, income -Tax deferred and/or tax free income

These benefits can include sick leave, vacation, and personal time; life, health, and disability insurance; tuition, reimbursement programs; pension, profit sharing, and __________ retirement plans

401(K)

When do most Americans start thinking about retirement?

40s and 50s

The cost of this postponed planning is a substantially ______________ level of retirement income

Lower

flexible spending accounts (FSA) for _______ care and health care expenses.

child

tax planning involves evaluating your current and projected earnings and developing strategies that can legally _________ and/or __________ your tax liability.

defer; reduce

Employee benefit planning involves selecting, coordinating, and managing employer-provided composition that _____________ the form of cash payments, such as wages, salaries, and commissions

does not take

At what age is generally recommended that you begin your liability and insurance planning activities?

early 20s

tax-free investments are so called because the interest or other income paid to their owners is _________ federal, and perhaps state tax.

free of

It is critical that you begin saving for retirement _____________________ you retire

long before

Owners of tax-deferred investments are allowed to _________ paying taxes on any returns generated by the investments

postpone

Estate planning the second half of retirement planning, involves the method by which your ___________ will be passed on to your heirs, often by way of wills, trusts, and gifts

wealth