Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
110. Funds deposited into an IRA cannot be withdrawn until you retire.
111. In order to qualify as a tax shelter, IRA saving plans must be invested in mutual funds.
112. Withdrawals from an IRA prior to age 59½ generally are subject to taxes and a penalty.
113. Earnings from traditional IRA investments are taxable at the time they are earned.
114. A simple IRA, which allows workers to contribute larger amounts than a regular IRA, is
available to employees who work for firms with fewer than 100 employees.
115. MyIRA is a Roth IRA-type retirement savings plan for low and middle-income individuals.
116. The money a worker invests in a 401(k) retirement account reduces that worker's present
taxable income.
117. Employers often match part of the contribution of their employees into a 401(k) retirement
plan.
118. Large corporations with at least 500 employees can offer their employees a simple 401(k)
retirement plan that allows for greater contribution maximums.
119. Many small-business owners invest in 401(k) plans for their retirement.
120. The best way to invest in a 401(k) plan is to use all of the money to buy stock in the
company where you work.
121. Keogh plans are intended to help small business owners save for retirement.
122. Keogh plans are most useful for stockholders of major corporations who earn most of their
income from dividends rather than wages or salaries.
123. Employees of small businesses can contribute to a Keogh plan.
124. IRAs, 401(k), and Keogh plans all include incentives to encourage saving for retirement.
125. Earnings of Keogh plans are not taxed until the funds are withdrawn from the retirement
account.
126. The best financial planners are actually insurance salespeople.
127. If you have minor children, the first step in estate planning is to select their guardian.
128. The person who is named in your will to assemble the assets in your estate, handle taxes,
and distribute the assets is called your proxy.
129. The reason you would prepare a durable power of attorney is to make sure that someone
was named to take over your finances if you become incapacitated.
130. Recent demographic trends suggest that the financial condition of the Social Security
program soon will begin to improve.
131. An individual retirement account (IRA) is a tax-deferred investment plan designed to
encourage workers to save for retirement.
132. IRA funds are not available for withdrawal until you are 59½ years old.
133. A person in the 25 percent tax bracket who invests $1,000 in a traditional IRA
immediately postpones $250 in taxes.
134. Monica expects to be in a much higher tax bracket when she retires than she is now, so
she wants to invest in a retirement account in which her withdrawals will be tax-free. One way
135. Ricardo desires to reduce his current taxable income and save for retirement. He should
consider a traditional IRA.
136. Roberta has just opened a 401(k) retirement plan. The money she invests in this plan will
reduce Roberta's present taxable income.
137. Bernie owns a sports card-trading business. He can participate in a Keogh plan to save
for his retirement.
138. Mikel is in need of advice regarding investments, taxes, and insurance for herself and her
family. She would be well advised to seek the advice of an insurance salesperson.
139. Harriett has just made out a will. The will names her brother Harold as the executor. This
means that Harold will have the authority to take over Harriett's finances if she becomes
incapacitated.
140. Financial planning begins with:
141. Throughout history an investment in ________ has yielded an excellent return, regardless
of the state of the economy or political changes.
142. Approximately what percent of the population is successful in saving enough money for
retirement to live comfortably?
143. The only way to accumulate enough money to do all of the things you want to do late in
life is to:
144. Which of the following would be included as an asset in the preparation of a personal
balance sheet?
145. In preparing an income statement for yourself, the wages from your job would be shown
as:
146. When you prepare your personal balance sheet, remember that your ________ is equal to
your total assets minus any liabilities you have.
147. The first step you would take to get control of your personal finances is to:
148. Personal financial planners often encourage their clients to write down every single
penny they spend each day. The main purpose of this is to:
149. A(n) _______ is a personal financial plan that allows you to take control of future
spending.
150. Budgets are:
151. Preparing and living with a personal budget is:
152. A financial planner would encourage you to borrow money:
153. Many financial experts advise that you set up a contingency fund equal to about ________
of your earnings and keep these funds in highly liquid accounts.
154. Once you have set up a budget and handled your ordinary expenses, the first thing to do
with any extra money you have is to:
155. Which of the following accounting statements would assist an individual in taking
inventory of personal assets and liabilities?
156. Young married couples that find themselves running out of money at the end of the
month might be well advised to:
157. The best way to save money is to:
158. Bob's credit card charges him 14% interest on his unpaid balance. His bank is offering
him 5% interest on a savings account. The first thing Bob should do with any extra money he may
have is to:
