Retirement Accounts

The account matters as much as the investment.

12 problems · about 21 minutes · TEKS M.M.8.B

NameDate

Figure — use these to answer the problems

Retirement growth is this curve. Most of the height arrives in the final years, which is why the start date dominates.

y = 1 · 1.5^x + 0

a, starting amount1

b, growth factor1.5

Figure 1

Straightforward practice. Get the method working first.

5 problems

A 5% match on a $40000 salary. Match in dollars?
Answer
2
Why is an employer match described as free money?
- It doubles the matched contribution immediately.
- Because it is not taxed at all.
A 4% match on a $60000 salary. Match in dollars?
Answer
A 6% match on a $45000 salary. Match in dollars?
Answer
Contributing $2000 with a full match. Total added in dollars?
Answer

The same ideas with more to keep track of.

3 problems

Match threshold $2500, you contribute $1000. Match left unclaimed, in dollars?
Answer
What return does a full match give on the matched portion, in percent?
Answer
Does early withdrawal usually carry a penalty? 1 yes, 0 no.
Answer

Mixed problems. Work out what kind of question it is before you start.

4 problems

9
Put the retirement saving priorities in order, best first.
Write 1 to 4 in the boxes to put these in order.
- Contribute enough to claim the full employer match.
- Clear high interest debt.
- Build the emergency fund.
- Invest anything beyond that for the long term.
A 3% match on a $70000 salary. Match in dollars?
Answer
The Match
A 5% match on a $50000 salary. Match amount in dollars?
Answerdollars
The Total
You contribute $2500 and the employer matches it fully. Total added, in dollars?
Answerdollars