16.4 your financial future

Question 1

a report atht summarizes your current financial condition, acknowledges your financial needs, and sets a direction for your future financial activities

Answer 1

financial plan

Question 2

What are some ways you can ensure you have money after retiring?

Answer 2

• social security
• pensions
• individual retirement accounts
• annuities

Question 3

financial goals can be ___ term or ____ term

Answer 3

financial goals can be short term or long term

Question 4

What are some types of retirement accounts?

Answer 4

• IRA
• 401(k)
• Keogh
• SIMPLE
• SEP

Question 5

Each life stage has _____ matters

Answer 5

each life stage has financial matters

Question 6

provides pensions to retired workers and their families

Answer 6

social security

• these benefits are funded by payroll taxes
• the taxes are deducted from employees’ paychecks

Question 7

insurance is available that will provide an income to those who fear the two most common causes of loss of income:

_____ and ______

Answer 7

disability and unemployment insurance

Question 8

a financial plan must be _____

Answer 8

flexible

Question 9

the only way to have money in the ____ is to spend less than you receive

Answer 9

the only way to have money in the future is to spend less than you receive

Question 10

the overuse of ____ and other poor spending habits are the basis for long term financial disaster

Answer 10

the overuse of credit and other poor spending habits are the basis for long term financial disaster

Question 11

A financial inventory will usually include the creation of a personal ____ and _____ statement

Answer 11

a financial inventory will usually include the creation of a personal balance sheet and cash flow statement

Question 12

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

Answer 12

unemployment insurance

Question 13

____ term financial goals are often more complex and involve a longer period

Answer 13

long term financial goals are often more complex and involve a longer period

Question 14

a financial planner should have studied and passed exams on topics like…

Answer 14

• investments
• insurance
• taxes
• real estate
• estate planning

Question 15

What are the steps in the financial planning process?

Answer 15

1. analyze your current financial condition
2. develop financial goals that are responsive to your vision
3. create your financial plan
4. implement the plan
5. revise your financial plan

Question 16

your financial plan should be ____ and adjusted on a regular basis to produce the outcomes you desire

Answer 16

your financial plan should be evaluated and adjusted on a regular basis to produce the outcomes you desire

Question 17

a tax sheltered retirement plan in whic people can annually invest earnings up to a certain amount

Answer 17

IRA

Individual Retirement Account

• are tax deductible

Question 18

Once people retire, their salaries stop, but they continue to ____ money to cover living expenses

Answer 18

once people retire, their salaries stop, but they continue to need money to cover living expenses

Question 19

involves the accumulation and management of property during one’s lifetime and the distribution of one’s property at death

Answer 19

estate planning

Question 20

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)

Answer 20

your budget and spending activities should also involve sharing

Question 21

changes in your _____ will require changes in spending and saving habits

Answer 21

changes in your goals will requre changes in spending and saving habits

Question 22

a financial inventory is a careful assessment of your ____

Answer 22

a financial inventory is a careful assessment of your finances

Question 23

planners who can help you create a financial plan

Answer 23

financial planners

Question 24

a series of regular payments made to a retired worker under an organized plan

Answer 24

pension

Question 25

to keep your financial inventory and other records in order, you should create a personal financial ____ system

Answer 25

to keep your financial inventory and other records in order, you should create a personal financial filing system

Question 26

What are some advantages of financial planning?

Answer 26

• 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

Question 27

during your life you build your ____ through savings, investments and insurance

Answer 27

during your life you build your estate through savings, investments and insurance

Question 28

every financial decision you make will affect both ___ spending and long term financial goals

Answer 28

every financial decision you make will affect both current spending and long term financial goals

Question 29

means the investment earnings will be taxed later, after retirement

Answer 29

tax deferred

Question 30

once you have an understanding of changes in your financial or personal situation, you should consider ____ in your financial goals

Answer 30

once you have an understanding of changes in your financial or personal situation, you should consider changes in your financial goals

Question 31

includes evaluating one’s financial position, setting financial goals, and guilding activities and resources toward reaching those goals

Answer 31

financial planning

Question 32

implementing your financial plan may involve ____ actions

Answer 32

implementing your financial plan may involve many actions

Question 33

replaces income that is lost when you cannot work because of an illness or injury

Answer 33

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

Question 34

an amount of money an insurance company pays to a person who has previously deposited money with the company

Answer 34

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