15The traditional IRA allows tax-deductible contributions of up to $4000 for individual who are not covered by employer-sponsored retirement plans or meet income qualifications if they have an employer plan.
103Since most workers have employer-sponsored disability coverage and are also eligible for Social Security and worker’s compensation, there is very little demands or need for individual disability insurance.
105Definitions to knowMutual Fund- an investment in which people pool their money to buy stocks, bonds, real-estate, or other assets selected by professional managersLiability- something that is owed or the borrowing of moneyAsset-what you ownNet worth- a measure of the level of your wealth. It is determined by subtracting the level of your debt or borrowing from the value or your assets.
106Income statement- a statement that tells you where your money has come from and where it has gone over some period of time.Annuity- an investment that guarantees regular payments to the holder, usually beginning at retirement and continuing for a fixed number of years or until death
107Beneficiary- a person named to receive the benefits from an insurance policy Capital gain- the profit from the sale of assets such as stocks, bonds, or real estateCash flow statement- a summary of receipts and payments for a given period of time; also called an income and expense statementCommon stock- a stock whose owner has voting rights and receives dividends based on company profits
108401(k) plan- a tax deferred retirement plan funded by regular contributions from the employee IRA- individual retirement account; a personal retirement plan that permits individuals to set aside money; with the contributions and earnings not taxed until the funds are withdrawnRoth IRA- a personal retirement plan in which the original contributions are not tax-deductible, but the earning are tax- free
109Liquidity- the ability of an asset to be quickly and easily converted into cash Opportunity cost- the cost of giving up one thing to get something elseSocial Security- the federal program that people pay into while they are working, that pays disability, retirement, and life insurance benefits to eligible recipients