Economics Today and Tomorrow, Student Edition
1st Edition
ISBN: 9780078747663
Author: McGraw-Hill
Publisher: Glencoe/McGraw-Hill School Pub Co
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Question
Chapter 6, Problem 16AA
To determine
To evaluate: The various types of retirement plans that are available for the individuals.
Expert Solution & Answer
Explanation of Solution
The three common types of retirement plans for individuals are explained below:
- A pension scheme which allows an employer to contribute to an amount of money reserved in the future to support a worker is called a pension scheme. The pool of assets is invested on the side of the employee, and upon retirement returns on the assets yield profits to the worker. Most pension schemes have a voluntary portion of the fund, besides the compulsory contributions provided by an employer. A pension plan would
demand that a worker contribute a portion of his current wage income to an investment program to help fund the retirement. - A tax-deductible pension plan which is available for retirement purposes to self-employed people or unincorporated companies is called a Keogh scheme. A Keogh plan can be generated either as a defined contribution plan, whereas most program are organized as a defined contribution plan. Usually donations are tax-deductible up to a certain percentage of taxable income, with overall caps on US dollars that the Internal Revenue Service will change year after year
- IRA portfolios will cover a wide array of instruments of finance, like stocks, shares, ETFs and mutual funds. A self-managed IRA may be a conventional IRA or a Roth IRA. Self-managed IRAs enable investors to undertake the decisions and give them exposure to a broader range of assets, such as real estate, private placements and tax liabilities. Tax payers may set up either traditional or Roth IRAs, whereas owners of small businesses and self-employed persons set up SEP and SIMPLE IRAs.
Economics Concept Introduction
Introduction: Retirement planning is the process of assessing the retirement income targets and the actions needed to accomplish those goals. Planning for retirement includes specific revenue streams, expense management, the execution of a savings program and risk and asset monitoring. Future cash flows are measured to determine whether the pension earnings target is met
Chapter 6 Solutions
Economics Today and Tomorrow, Student Edition
Ch. 6.1 - Prob. 1RCh. 6.1 - Prob. 2RCh. 6.1 - Prob. 3RCh. 6.1 - Prob. 4RCh. 6.1 - Prob. 5RCh. 6.1 - Prob. 6RCh. 6.2 - Prob. 1RCh. 6.2 - Prob. 2RCh. 6.2 - Prob. 3RCh. 6.2 - Prob. 4R
Ch. 6.3 - Prob. 1RCh. 6.3 - Prob. 2RCh. 6.3 - Prob. 3RCh. 6.3 - Prob. 4RCh. 6.3 - Prob. 5RCh. 6 - Prob. 1AACh. 6 - Prob. 2AACh. 6 - Prob. 3AACh. 6 - Prob. 4AACh. 6 - Prob. 5AACh. 6 - Prob. 6AACh. 6 - Prob. 7AACh. 6 - Prob. 8AACh. 6 - Prob. 9AACh. 6 - Prob. 10AACh. 6 - Prob. 11AACh. 6 - Prob. 12AACh. 6 - Prob. 13AACh. 6 - Prob. 14AACh. 6 - Prob. 15AACh. 6 - Prob. 16AACh. 6 - Prob. 17AACh. 6 - Prob. 18AACh. 6 - Prob. 19AACh. 6 - Prob. 20AACh. 6 - Prob. 21AACh. 6 - Prob. 22AACh. 6 - Prob. 23AACh. 6 - Prob. 24AACh. 6 - Prob. 25AACh. 6 - Prob. 26AA
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