Most family child care providers, like most taxpayers, are not saving enough for their retirement.
Many do not have a good understanding of how to plan for their retirement.
Test your retirement knowledge by taking this short quiz.
1) Social Security payments will replace approximately what percentage of the current earnings of the average taxpayer?
a. 20% b. 40% c. 60% d. 70%
2) If a provider’s only work was doing child care for fifteen years and she had a profit over $400 for nine of those fifteen years, would she qualify to receive Social Security benefits?
a. Yes b. No
3) You can start receiving Social Security retirement benefits at age 62. If you do so you will receive lower benefits than if you waited until your full retirement age of 65, 66, or 67 depending on when you were born. Under what circumstances might you take benefits starting at age 62?
a. Current bad health b. Immediate financial stress c. History of early death in your family d. All of the above
4) If you aren’t saving enough now to be able to retire at age 66/67 what can you do?
a. Work beyond age 66/67 b. Save more now c. Live on less in retirement d. All of the above
5) If you save $35 a week and earn 8% a year in a tax deferred IRA, how much will you have in twenty years?
a. $10,232 b. $15,741 c. $25,655 d. $37,143
6) Can a single provider making a profit of $75,000 invest in both a SIMPLE IRS and a Roth IRA each year?
a. Yes b. No
7) If you invest in an index fund you are adopting what type of an investment strategy?
a. Passive b. Active
Image credit: www.ifa-fiv.org
For more information see my book Family Child Care Money Management and Retirement Guide