R - Retirement Module Overview
Retirement Module Overview
Introduction
Why are we talking about retirement? I am not old! I am nowhere close to being old! You have probably heard your parents or grandparents discuss what they plan to do when they retire. You may have even heard a stranger confess that they want to travel more and enjoy life when they retire. The truth is you should enjoy every day of your life! As for retirement, you should start thinking about and planning for that as soon as you graduate and start working in your chosen career. Why? Because by doing this, you allow your money more time to grow and when you are ready to retire you will have enough to live as comfortably as you did before retirement. You definitely do not want to wait until you are close to retirement to start planning. The goal is to be able to maintain the same lifestyle while working and during retirement when you are not working. This module teaches you the types of retirement plans usually offered by employers and by the government. It also teaches you about options to develop a retirement account unrelated to your job. So, pay close attention here...your future lifestyle depends on it!
Essential Questions
- How will I benefit from a retirement plan?
- When should I start planning for retirement?
- What retirement plans are offered by employers?
- What retirement options are available for individuals outside of their jobs?
- How can you use matrices to solve retirement planning problems?
Key Terms
Retirement: the point in time when a person chooses to leave the workforce permanently, usually at age 65 or older
Compounding Interest: when money is earned on the total amount in the account including the initial deposit and interest that has already been credited to the account
Inflation:the annual percentage increase in the prices of goods and services
Social Security: a U.S. government program that provides retirement, disability, and death benefits income for eligible employees
Medicare: a U.S. government program that pays for certain health care expenses for people 65 years of age and older
IRA (Individual Retirement Account): a retirement investment account that allows a person to save a specified amount of income each year in a tax-deferred account
401(k): a retirement investment plan that allows an employee to invest a percentage of their wages into a tax-deferred account chosen by the employer
403(b): a retirement plan available to employees of certain non-profit organizations that allows them to invest a percentage of their wages in a tax-deferred account
IMAGE SOURCE: TAXCREDITS.NET