Retirement_SS10.key - Which one to choose? 1. 2. STOCKS...

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Which one to choose? 1. 2. STOCKS STOCKS Which one to choose? Small amount of insurance. Large amount of insurance. 1. 2. 3. 4. 80% Stocks 20% Bonds 80% Bonds 20% Stocks 80% Stocks 20% Bonds 80% Bonds 20% Stocks How does retirement look? Why worry about retirement? • Children later in life – 20 30 40 – 40 50 55 – 60 70 75 • Do not stay with the same employer • Future is unknown! • Expenses in retirement -Income before retirement • GAP Females, talking to YOU • Women are less likely to be covered employer-sponsored retirement benefits. • Women - 39% • Men - 44% • Women earn less than men. • Women live longer than men. • So, more important to save! Three cornerstones of retirement planning Government Employer Personal
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• Defined Benefit • 30 years x .02 = .60 • $50,000 x .60 = $30,000 • Defined Contribution • YOU decide how to invest your money! Defined BENEFIT Plan • Advantages • No risk to you. • Protected by PBGC • Disadvantages • Employer needed to be wise. • Employer benefited on additional $$. • Changing jobs. Defined CONTRIBUTION Plan • Advantages • You decide. • You benefit from tax-free growth. • PRE tax money • You keep in job change. • Loan. ..... • Disadvantages You need to make wise decisions. • You lose from loss. 5% not used for consumption. • You see growth and want to use it. • Loan. ..... Employer plans Match or no match? • Private industry • 401(k) • Non-profit, government • 403(b) • 457 Retirement Investments • Stock • Growth • Equity Index • Social Choice • Bond • Money Market • Real Estate What about company stock? No more than 10% of your
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This note was uploaded on 11/11/2011 for the course FCE 238 taught by Professor Boyce during the Fall '07 term at Michigan State University.

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Retirement_SS10.key - Which one to choose? 1. 2. STOCKS...

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