Which of the following do you not need to take into account when you retire? A) the cost of living in your city or state B) whether your money comes from active or passive income C) your monthly expenses D) how much you have saved in your retirement fund
Which of the following do you not need to take into account when you retire? A) the cost of living in your city or state B) whether your money comes from active or passive income C) your monthly expenses D) how much you have saved in your retirement fund
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Which of the following do you not need to take into account when you retire?
A) the cost of living in your city or state
B) whether your money comes from active or passive income
C) your monthly expenses
D) how much you have saved in your retirement fund
Expert Solution
Step 1
When planning for retirement, you need to consider several factors to ensure that you will have sufficient funds to support your lifestyle after you retire. These factors include:
- The cost of living in your city or state - this is important because the cost of living varies from place to place, and you will need to ensure that your retirement income is sufficient to cover your expenses.
- Your monthly expenses - you will need to determine your monthly expenses to estimate how much income you will need during retirement.
- How much you have saved in your retirement fund - this is important because it will determine how much income you can generate from your savings.
- Whether your money comes from active or passive income - this factor is not as relevant in retirement planning because it does not affect how much income you will have available to cover your expenses.
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