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1

Retirement 1-1 Needs Analysis

Module Check Summary

1. At the beginning of the 20th century, retirement planning was relatively unimportant. Which of the following statements correctly states a reason why it was unimportant?

a. Most people did not live to retirement age.

b. Few people were interested in planning for retirement.

c. There was no Social Security.

d. There were few companies with pension plans.

a. Most people did not live to retirement age.

The average life expectancy for a male born in 1900 was 46 years.

People were interested in planning for retirement. However, few people lived long enough to retire comfortably. Social Security did not exist at the turn of the century. However, most people would not have lived long enough to take advantage of Social Security even if it had existed. Due to relatively short life spans, pension plans were not widespread. However, short life spans were the reason for the lack of retirement planning.

2

Retirement 1-1 Needs Analysis

Module Check Summary

2. Planning for retirement is now more important than ever before. Which one of the following statements correctly identifies the reason for this change?

a. Social Security is not sufficiently funded.

b. Medicare is almost bankrupt.

c. People are living much longer than they did in the past.

d. Defined benefit plans have been displaced by the 401(k) account.

(LO 1-1)

c. People are living much longer than they did in the past.

It is quite possible that longer life spans will put a strain on government social programs. Accordingly, retirement planning has become more important.

Whether or not Social Security is sufficiently funded is debatable. However, longer life spans are the biggest reason that retirement planning has become more important. Although 401(k) plans have become widely popular as a retirement planning tool, longer life spans are the most important reason that retirement planning has become more important.

3

Retirement 1-1 Needs Analysis

The vast majority of Americans now retire between the ages of

a. 65 and 70

b. 62 and 65

c. 60 and 62

1-1

b. 62 and 65

4

Retirement 1-1 Needs Analysis

In 1900, a newborn male could expect to live just over __ years and a female could expect to live __ years.

a. 45 and 50

b. 46 and 49

c. 56 and 59

1-1

b. 46 and 49

5

Retirement 1-1 Needs Analysis

Today, the average life expectancy in the United States is:

a. 76

b. 77

c. 78

d. 79

1-1

c. 78

6

Retirement 1-1 Needs Analysis

By 2070, it is estimated that the length of the average retirement period will be more than __ years.

a. 20

b. 25

c. 30

d. 35

1-1

a. 20

7

Retirement 1-1 Needs Analysis

Today, one out of every four adults in our society today is over age 50. By 2020, __ of Americans will be over age 50.

a. 1/2

b. 1/3

1-1

b. 1/3

8

Retirement 1-1 Needs Analysis

The dramatic rise in the number of _____ Americans may have several implications: increased poverty, increased health care costs, and increased need for long-term care.

a. Older

b. Younger

1-1

a. Older

9

Retirement 1-1 Needs Analysis

The retirees of this millennium will be mostly:

a. Men

b. Women

1-1

b. Women

10

Retirement 1-1 Needs Analysis

Today, women comprise about __% of those who are over age 75 and who live alone.

a. 55%

b. 65%

c. 75%

d. 85%

1-1

c. 75%

11

Retirement 1-1 Needs Analysis

Today, more than half of the women who are over age 75 and who live alone also live in poverty—with incomes less than $_____

a. $8,000

b. $10,000

c. $12,000

d. $15,000

1-1

b. $10,000

12

Retirement 1-1 Needs Analysis

A potential _____ event represents perhaps the greatest threat to the financial security of a retired couple.

a. Inflation

b. Long term care

c. Economic downturn

1-1

b. Long term care

13

Retirement 1-1 Needs Analysis

According to Medicare, about nine million people in the United States over the age of 65 needed some form of long-term care services in 2012. This need is expected to continue rising. By 2040, it is estimated that more than _____ people will need some form of long-term care service.

a. 10 million

b. 20 million

c. 30 million

d. 40 million

b. 20 million