10 Long-Term Financial Planning Free Online FlashCards

What four elements connect a financial goal to a plan?

A useful plan gives each goal a target amount, a date, a funding method, and a way to track progress.

Are financial priorities at different life stages fixed rules?

They are common patterns, not rules. People can pursue goals in different orders or at the same time.

How should the time horizon affect where you keep money?

Money needed soon is generally better kept in lower-risk, accessible savings; long-term investments can fluctuate and lose value.

What can diversification do—and not do—for investment risk?

Diversification can spread investment risk, but it cannot eliminate it.

How does a budget help balance competing goals?

A budget shows how saving for one goal affects what is available for others, making trade-offs visible.

How can automation support saving progress?

Regular transfers or payroll deductions can make progress more consistent. Revisit contribution amounts when income or expenses change.

How is a retirement income gap estimated?

Compare estimated future expenses with likely income from Social Security, pensions, and retirement savings. The remaining difference is the income gap.

Why use a personalized Social Security estimate?

Use a personalized estimate based on your earnings record rather than assuming a single benefit amount.

What should you check when evaluating a workplace retirement plan or IRA?

Check plan rules, fees, and tax treatment, and find out whether an employer offers a matching contribution.

What uncertainties should a retirement withdrawal plan consider?

Consider how inflation, market downturns, taxes, and unexpected expenses could affect the balance between dependable income and withdrawals from savings.

Does Medicare generally pay for long-term custodial care?

Medicare generally does not pay for long-term custodial care, so people may need to consider personal resources, insurance, or other available support.

How should you compare saving for a major expense with borrowing?

Compare saving in advance with the total cost and risks of borrowing, including interest and fees.