Chapter 3: Money Review Dave Ramsey
Terms in this set (28)
retirement for self employed people.
the typical retirement plan found in most corporations.
used for college savings.
the typical retirement plan found in non-profit groups such as schools and hospitals.
pre-tax means the government is letting you invest money before taxes are have been taken out.
savings bonds are a good way to save for college.
never borrow money from your retirement plan.
when you leave a company dont move your money from the retirement account.
an IRA is a specific type of investment.
the ____ IRA grows tax-free.
an educational savings account (ESA) is used for ?
which of the following is not a retirement plan? a. 529 b. 401 (k) c. 403 (b) d. 457
which is not a benefit of the Roth IRA? a. grows tax-free b. unlimited contributions c. provides penalty-free withdrawals under certain circumstances d. more choices
b. unlimited contributions
if your company provides 100% match up to 6% how much should you personally contribute to your 401 (k) if you earn $35,000 (not including the money the company contributed)?
if you contribute $2,300 to your 401 (k) and your company matches up to 3% how much is in the account (assume you have not gone over the 3% match)?
2,300 match = 4,600 total
what should you do with your retirement accounts when you leave a company?
never save for college using: a. pre-tax dollars b. pre-paid tuition c. savings bonds d. both b and c
d. both b and c
baby step 5 is
if carol and joe are debt free how much should they be investing in retirement plans if their combined income is $145,000?
$145,000•.15 = $21,750
how much of your income should you put in retirement?
what are the advantages of the Roth IRA?
they are tax-free
what is baby step 4 and why does your emergency have to be fully funded before you begin this step?
and because you could lose money and you dont want to be broke when trying to invest.
list some ways you can avoid student loan debt if you do not have a college fund
save for college by using ESA. if you dont meet the income standards then use a 529 plan.
why should you take a 401 (k) match (if a company offers one) before you start a Roth IRA?
because your company is giving you free money.
explain what is meant by tax-favored dollars.
protected against certain taxes.
why worry about retirement when every worker pays into social security?
social security is facing trouble
explain how the rule of 72 works.
the rule of 72 says dividing the interest rate into 72 will tell you about how many years it will take to double your money.