Family child care providers, like most people, generally haven’t done a good job at saving money for their retirement.
In a survey done for my book Family Child Care Money Management & Retirement Guide, 55% of child care providers had saved less than $10,000 towards their retirement goals. Of those child care providers who were in their 50s, 46% had saved less than this amount and only 22% had saved more than $100,000!
Here’s a quiz you can use to test how well you understand retirement planning.
1) All child care providers are eligible to set up a SIMPLE IRA. True or False?
2) If you work nine years as a child care provider and this is your only work experience, you will not qualify to receive Social Security benefits. True or False?
3) The longer you wait to save money for your retirement, the more money you will need to save. True or False?
4) The maximum you can contribute to a Traditional IRA each year is $5,500 if you are age 50 or older. True or False?
5) Most experts believe that you will need to have about 70-80% of your current income in retirement to maintain your current standard of living. True or False?
6) Contributions to a Roth IRA are tax deductible. True or False?
7) In the long run, saving money inside an IRA will earn you more money than saving outside of an IRA. True or False?
8) The amount you pay in management fees on your retirement investment has a major impact on how much you will earn on your investment. True or False?
9) Because of the volatility of the stock market, it’s never a good idea to have more than 10% of your retirement funds invested in stocks. True or False?
10) Investing in individual stocks is more risky than investing in a stock mutual fund. True or False?
1-5 answers correct – Novice: time to bone up!
6-8 answers correct – Smart: good work!
9 answers correct – Expert: superior work!
10 answers correct – Master: fantastic!
How well did you score?
Tom Copeland – www.tomcopelandblog.com
Image credit: blogs.umdbk.com
For more information about retirement planning, see my book Family Child Care Money Management and Retirement Guide.