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Retirement Planning for the Utterly Confused published worldwide January 2008

Federal Reserve Quiz


Part One

Personal Financial Literacy Quiz:

8. Retirement income paid by a company is called:

    a.) 401 (k).
    b.) Pension. These have become rare, especially after the 401(k) plan became widely accepted by companies. Pensions are defined benefit plans because the pay a set dollar amount based on years worked. 401(k) plans are called defined contribution plans because their success - and ultimately, the payout -is determined by how much a worker contributes over the course of a career.
    Pensions are not portable but may be payable by one company even if you leave and work for someone else. 401(k) plans on the otherhand, are portable and usually must be taken with you and rolled over into another deferred tax account.

    c.) Rents and profits.
    d.) Social Security.

back to the quiz



Previous Commentary available here


Retirement Planning for the Utterly Confused Investing for the Utterly Confused by Paul Petillo

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