16.4 your financial future Flashcards
a report atht summarizes your current financial condition, acknowledges your financial needs, and sets a direction for your future financial activities
financial plan
What are some ways you can ensure you have money after retiring?
- social security
- pensions
- individual retirement accounts
- annuities
financial goals can be ___ term or ____ term
financial goals can be short term or long term
What are some types of retirement accounts?
- IRA
- 401(k)
- Keogh
- SIMPLE
- SEP
Each life stage has _____ matters
each life stage has financial matters
provides pensions to retired workers and their families
social security
- these benefits are funded by payroll taxes
- the taxes are deducted from employees’ paychecks
insurance is available that will provide an income to those who fear the two most common causes of loss of income:
_____ and ______
disability and unemployment insurance
a financial plan must be _____
flexible
the only way to have money in the ____ is to spend less than you receive
the only way to have money in the future is to spend less than you receive
the overuse of ____ and other poor spending habits are the basis for long term financial disaster
the overuse of credit and other poor spending habits are the basis for long term financial disaster
A financial inventory will usually include the creation of a personal ____ and _____ statement
a financial inventory will usually include the creation of a personal balance sheet and cash flow statement
insurance coverage that provides cash payments for a limited time to people who are out of work for a reason other than illness; offered by most states
unemployment insurance
____ term financial goals are often more complex and involve a longer period
long term financial goals are often more complex and involve a longer period
a financial planner should have studied and passed exams on topics like…
- investments
- insurance
- taxes
- real estate
- estate planning
What are the steps in the financial planning process?
- analyze your current financial condition
- develop financial goals that are responsive to your vision
- create your financial plan
- implement the plan
- revise your financial plan
your financial plan should be ____ and adjusted on a regular basis to produce the outcomes you desire
your financial plan should be evaluated and adjusted on a regular basis to produce the outcomes you desire
a tax sheltered retirement plan in whic people can annually invest earnings up to a certain amount
IRA
Individual Retirement Account
- are tax deductible
Once people retire, their salaries stop, but they continue to ____ money to cover living expenses
once people retire, their salaries stop, but they continue to need money to cover living expenses
involves the accumulation and management of property during one’s lifetime and the distribution of one’s property at death
estate planning
your budget and spending activities should also involve _____, like religious donations or contributions to local and global organizations that provide food, housing and other necessities to people in need (charities)
your budget and spending activities should also involve sharing
changes in your _____ will require changes in spending and saving habits
changes in your goals will requre changes in spending and saving habits
a financial inventory is a careful assessment of your ____
a financial inventory is a careful assessment of your finances
planners who can help you create a financial plan
financial planners
a series of regular payments made to a retired worker under an organized plan
pension
to keep your financial inventory and other records in order, you should create a personal financial ____ system
to keep your financial inventory and other records in order, you should create a personal financial filing system
What are some advantages of financial planning?
- your financial uncertainties will be reduced
- you will gain more control of your financial activities
- your family and household members will know more about your financial situation in case they need to assume control of your finances
- earning, spending, protecting and saving your resources will be more systematic
during your life you build your ____ through savings, investments and insurance
during your life you build your estate through savings, investments and insurance
every financial decision you make will affect both ___ spending and long term financial goals
every financial decision you make will affect both current spending and long term financial goals
means the investment earnings will be taxed later, after retirement
tax deferred
once you have an understanding of changes in your financial or personal situation, you should consider ____ in your financial goals
once you have an understanding of changes in your financial or personal situation, you should consider changes in your financial goals
includes evaluating one’s financial position, setting financial goals, and guilding activities and resources toward reaching those goals
financial planning
implementing your financial plan may involve ____ actions
implementing your financial plan may involve many actions
replaces income that is lost when you cannot work because of an illness or injury
disability income insurance
- most disability insurance will pay 60-70% of your salary while you are disabled
- before benefits begin there is normally a waiting period of 1 week to 90 days after being disabled
an amount of money an insurance company pays to a person who has previously deposited money with the company
annuity
- is an investment plan for retirement income
- you pay the insurance company a certain amount of money either in a lump sum or a series of payments
- in return, the company agrees to pay you a regular income beginning at a certain age and continuing for life or for a specific number of years
