Major Sources of Retirement Income Include All of the Following

question 117

Multiple Choice

Major sources of retirement income include all of the following except

• A) life insurance.
• B) annuities.
• C) individual savings plans.
• D) employer retirement and pension plans.
• E) social security.

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Definitions:

Present Value

The present financial worth of expecting a sum of money or cash flows in the future, calculated by a certain rate of return.

Cash Flows

The cumulative amount of money circulating in and exiting a business, markedly influencing its liquidity position.

Effective Annual Rate

The interest rate on an investment or loan that is compounded annually, reflecting the full amount of interest paid or earned over a year.

Compounding

The process where the value of an investment increases because the earnings on an investment, both capital gains and interest, earn interest as time passes.