Question

Rebecca Murphy is planning for her retirement. She has done some checking and thinks she will get about $1025 a month from social security. She also thinks her pension plan at her work will pay her about $1125 per month. In addition, she has some personal retirement accounts that she thinks will pay her $500 per month. What step in the retirement planning process is Rebecca completing? A. Analyzing her current assets and liabilities B. Estimating her spending needs C. Evaluating ...

Answer 1

Rebecca Murphy is planning for her retirement. The step in the retirement process she is completing is that Rebecca is evaluating her planned retirement income.  Rebecca is checking on all aspects what total amount she will be receiving from social security, pension plan and some retirement accounts.

Answer 2

Available options:

A. Analyzing her current assets and liabilities

B. Estimating her spending needs

C. Evaluating her planned retirement income

D. Evaluating her retirement housing

E. Developing a balanced budget based on her retirement income

Answer:

C) Evaluating her planned retirement income

Explanation:

An individual's retirement planning process can include the following steps:

1. Set your retirement goals.
2. Assess your current financial position.
3. Evaluate retirement income sources: this step involves determining what are your viable retirement income sources, e.g. income from 401 K plan, income from social security, and income from other investments. It is hard to determine exactly what income will your retirement account or other investments yield, therefore you should be very cautious and not very overstate your potential income. Remember it is always better to plan a low yield and then be pleasantly surprised by a larger amount, than to expect huge cash flows that wouldn't exist.  
4. Evaluate retirement risks.
5. Understand health care issues.
6. Invest your retirement assets.
7. Manage your retirement income.