Retirement Vocabulary Practice

Fredo is considering his retirement savings options. What is a 401(k)?

• A type of bond issued by the government

• A company-sponsored retirement account to which employees can contribute income

• A tax-free savings account for education

• A type of insurance policy

What does 401(k) matching mean for Kaylee at her new job?

• When Kaylee's employer contributes money to her 401(k) account to reflect the contributions she's made

• When Kaylee matches her contributions to a charity

• When Kaylee matches her savings with her spouse

• When the government matches Kaylee's tax payments

Raul is planning his retirement and is considering different financial products. What is an annuity?

• A one-time payment received from an investment

• A contract that requires regular payments for more than one full year to the person entitled to receive the payments

• A type of stock that pays dividends

• A savings account with a fixed interest rate

Hugo is learning about investments and wants to understand how a bond functions. How does a bond function?

• As a savings account with a fixed interest rate

• As a loan where the issuer promises to repay the full amount of the loan on a specific date and pay a specified rate of return

• As a type of insurance policy

• As a retirement account

Tags

CCSS.HSF.LE.A.1

CCSS.HSF.LE.A.2

Hugo and Joe are discussing their financial goals. What is the primary purpose of an investment?

• To save money for emergencies

• To invest money for profit

• To pay off debts

• To donate to charity

What does retirement mean for Joe?

• The action of starting a new job

• The action of leaving one's job and ceasing to work

• The action of taking a vacation

• The action of buying a new house

Who is a broker?

• A person who repairs cars

• A person who buys and sells stocks for others

• A person who writes insurance policies

• A person who manages a restaurant

John is considering a career change and is interested in understanding what brokerage is. What is brokerage?

• The business or service of acting as a broker

• The process of buying a house

• The act of saving money in a bank

• The service of providing loans

Kaylee and Ethan are discussing investments. What does drawdown refer to in their conversation?

• A peak-to-trough decline during a specific period for an investment, trading account, or fund

• The process of withdrawing money from an ATM

• The increase in value of a stock

• The interest earned on a savings account

Joe is planning for his retirement and is considering different savings options. What is an Individual Retirement Account (IRA)?

• A tax-free savings account for education

• A tax-deferred account to which an eligible individual can make contributions

• A type of health insurance plan

• A government bond