#1
What is the recommended percentage of your income to save for retirement?
10-15%
ExplanationSave a portion of income to secure retirement finances.
#2
What is a 401(k)?
A type of retirement account provided by employers
ExplanationEmployer-provided retirement account.
#3
What is the 'rule of 72' used for in retirement planning?
Calculating the number of years it takes for an investment to double
ExplanationQuickly estimate investment growth.
#4
Which of the following is a tax-advantaged retirement account in the United States?
Roth IRA
ExplanationTax-advantaged retirement savings vehicle.
#5
What is the '4% rule' in retirement planning?
A guideline suggesting that you can safely withdraw 4% of your retirement savings annually
ExplanationWithdrawal guideline for retirement savings.
#6
What is the main purpose of an annuity in retirement planning?
To provide guaranteed income during retirement
ExplanationGuaranteed income stream for retirement.
#7
In retirement planning, what does the term 'asset allocation' refer to?
The process of dividing retirement savings among different investment types
ExplanationDiversifying retirement investments.
#8
What is 'sequence of returns risk' in retirement planning?
The order in which investment returns occur
ExplanationRisk from the timing of investment returns.
#9
What is the 'FIRE' movement in the context of retirement?
Financial Independence, Retire Early
ExplanationSeeking early financial independence and retirement.
#10
What is the aim of a 'longevity annuity' in retirement planning?
To provide income for life starting at a specified future age
ExplanationLifetime income starting at a designated age.
#11
What is the purpose of a 'backdoor Roth IRA'?
To bypass income limits for contributing to a Roth IRA
ExplanationStrategy to contribute to Roth IRA without income restrictions.
#12
What is the 'stretch IRA' strategy in retirement planning?
A method to delay required minimum distributions from an inherited IRA
ExplanationStrategy to prolong IRA distributions.