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5. Gunnar and Eloise plan to withdraw all of their money from their retirement accounts when they are 50 and live it up! Will they be able to withdraw their money at that age without incurring a substantial tax penalty ? If not, when? _ ______________________________________________________________________________ 6. Gunnar and Eloise wonder what tax deferred means? _ ______________________________________________________________________________ 7. Gunnar’s sister Gerta makes $40,000 a year as a paralegal. She expects to be making $60,000 when she retires in 20 years. According to experts, what percentage of this amount will she need as post-retirement income? How much is that? _ ______________________________________________________________________________ PRODUCT PREVIEW 8. T F When Gerta retires, she will need sources of income that produce $45,000–$51,000 annually. 9. T F Traditional sources of retirement income are second jobs, pensions, and inheritance. 10. T F 21st century challenges to a secure and comfortable retirement include increased life expectancy, an unstable Social Security fund, low personal savings rates, high student and consumer debt, and declining rates of homeownership. 11. Gunnar’s Great Uncle Gustav recently died and left Gunnar a valuable collection of Viking memorabilia. He wants to sell the collection and buy a motorcycle. On the other hand, he is very concerned that he and Eloise will not have enough money to retire. What’s your advice about this? _ ______________________________________________________________________________ _ ______________________________________________________________________________ _ ______________________________________________________________________________ 12. Gunnar and Eloise will have a lot of equity in their home by the time they retire. They have heard about something called a reverse mortgage . What is that? How does it work? _ ______________________________________________________________________________ _ ______________________________________________________________________________ _ ______________________________________________________________________________
Chapter 10 | Your Risky Retirement 192
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