#1
What is a common investment option for retirement accounts?
High-risk stocks
Cryptocurrency trading
Mutual funds
Collectibles
#2
At what age can individuals typically start withdrawing from their retirement accounts without penalty?
#3
What is the primary benefit of diversification in investment portfolios?
Guaranteed high returns
Minimization of investment risk
Tax exemption on profits
Access to exclusive investment opportunities
#4
What is the typical recommendation for the percentage of income to save for retirement?
5-10%
15-20%
25-30%
50% or more
#5
What is the purpose of a target-date retirement fund?
To provide a guaranteed income stream in retirement
To invest in high-risk assets for maximum returns
To automatically adjust asset allocation based on the investor's age
To provide tax benefits during retirement
#6
What does the term '401(k)' refer to in retirement planning?
An individual retirement account for self-employed individuals
A government-sponsored retirement plan
A type of pension plan offered by private employers
A savings account specifically for medical expenses
#7
What is the 'rule of 72' used for in investment planning?
Calculating the future value of an investment
Estimating how long it takes for an investment to double in value
Determining the tax implications of an investment
Predicting the inflation rate
#8
Which of the following is NOT a factor to consider when assessing retirement expenses?
Healthcare costs
Housing expenses
Income tax rates
Travel and leisure expenses
#9
What is the concept of 'asset allocation' in investment planning?
The process of selling off all assets before retirement
Spreading investments across different asset classes
Investing only in tangible assets like real estate
Putting all investments into a single high-yield stock
#10
What is the primary risk associated with investing heavily in high-yield bonds for retirement?
Inflation risk
Market risk
Interest rate risk
Default risk
#11
Which of the following is NOT a common type of retirement account in the United States?
IRA (Individual Retirement Account)
403(b)
529 Plan
Roth 401(k)
#12
What is the 'safe withdrawal rate' often recommended for retirees?
3-4%
10-12%
20-25%
50% or more
#13
What is the 'sequence of returns risk' in retirement planning?
The risk of losing investments due to market volatility
The risk of outliving retirement savings
The risk of experiencing poor investment returns early in retirement
The risk of failing to properly diversify investments
#14
What is the 'Monte Carlo simulation' often used for in retirement planning?
Predicting inflation rates
Forecasting market returns
Estimating retirement expenses
Assessing the probability of meeting retirement goals
#15
What is the primary goal of an income annuity in retirement planning?
To provide a lump sum payment at retirement
To provide a guaranteed income stream for life
To offer tax benefits during retirement
To invest in high-yield assets