Planning for retirement - 8/23/2011 Retirement Planning: A...

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8/23/2011 1 Retirement Planning: A Money Plan for Life HACE 3110 Dr. Brenda J. Cude Today’s Discussion y Saving for retirement through employment y Why? y Social Security y Employer Sponsored Retirement Plans y Defined benefit (pension) and defined contribution plans (401(k), 403(b), etc.) y Vesting, matching, tax-qualified y Personal Retirement Plans y Individual Retirement Accounts, Roth IRAs Money for Life Health Insurance
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8/23/2011 2 Why Think About Planning for Your Future NOW? y Employers and the federal government GIVE YOU MONEY to save for your future– if you “save” some on your own. y Y t t h h l t y You want to have choices later! y The “miracle” of ___________ – By starting now you can use TIME to replace MONEY! Compound Interest y Compound interest is interest calculated not only on the initial ______ (the original investment) but also the accumulated interest of prior periods y Think of it like a snowball rolling down hill. y That snowball will be bigger in the end IF: y It has longer to roll. y It’s big at the beginning. y The hill is steeper. y It isn’t stopped part way down the hill and
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8/23/2011 3 Investing $500 More a Year $192,287 OR $________ What If You Could Earn A Higher Interest Rate? $192,287OR$_________ You Lose the Advantage of Time IF y You take your money out of your savings, even if you later start over again.
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4 Start Early, Acquire the Habit, and Make Goals y It is important that you have the CHOICE in the future. y Starting NOW means you’re more likely to have those choices. y Acquiring the _______ of saving is more difficult than finding the money to save finding the money to save. y Payroll deduction makes it EASY to acquire the habit. y Employers and the government “GIVE” you money to saving for the future. Ways to Save for Your Future through Employment • Social Security and Medicare • Employer Sponsored Retirement Plans • Self-Employed Retirement Plans • Personal Retirement Plans Social Security y Introduced in 1935 y Provide an income to ________ who had contributed
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This note was uploaded on 09/30/2011 for the course HACE 3110 taught by Professor Cude during the Fall '11 term at University of Georgia Athens.

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Planning for retirement - 8/23/2011 Retirement Planning: A...

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