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LET’S PRACTICE
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Are You Financially Literate? Chapter 10 Quiz 1. Currently _____ % of senior Americans are living in poverty and more than _____ % of U.S. households are at risk of not having enough to maintain their preretirement living standards when they retire. 2. The risks of an underfunded retirement include: a. poverty b. reduction in standard of living c. financial instability and insecurity d. all of the above 3. What does preretirement standard of living mean? Provide an example. _ ____________________________________________________________________ _ ____________________________________________________________________ _ ____________________________________________________________________ 4. To maintain a preretirement standard of living when you stop working, experts say you will need to have retirement sources that provide ____% to ____% of your preretirement income. a. 20-25 c. 60-70 b. 40-45 d. 75-85 5. To save enough money for a comfortable retirement, you should be saving at least ____% to ____% of your annual earnings. a. 5-10 c. 20-25 b 10-15 d. 30-35 6. IRA stands for: a. Independent Retirement Association 52 PRODUCT PREVIEW
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b. Independent Resources Account c. Individual Retirement Account d. Important Retirement Announcement
7. Elian is 18. He’s going to community college for 2 years before he transfers to a 4 year college. He’s working about 25 hours a week at the local hardware store. He’s got some money in a savings account for emergencies and finally has some cash to spare. Can he open an IRA? Where can he do this? _ ____________________________________________________________________
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THE 21st CENTURY STUDENT’S GUIDE TO FINANCIAL LITERACY 193
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