Smell Dating: The New Tinder?  Smell Dating sends you a shirt and requests that you wear it for three days and three nights without deodorant.  Once this is accomplished, you send the shirt back and, in return, the company sends you swatches of t-shirts worn by other people looking for a mate.  You smell the mystery swatches and the matches begin!  This is based of the scientific idea that humans are more attracted to smell, rather than looks

Retirement Unit VIII: Savings, Investment, and Insurance Lesson 4

Retirement  Retirement is the stage in life when you can stop working and relax, but you need money to live off of  This money can come from regular savings accounts or investment accounts, but often comes other retirement specific accounts  These retirement accounts consist of social security, individual retirement accounts, 401k plans, and others

Social Security  Social Security was designed as a safety net to provide income for older people when they could no longer work  Social Security benefits are determined by the amount an individual has contributed to the system and the individual’s age when claiming the benefits  Benefits include disability and survivor benefits, as well as retirement income

Social Security Quick Facts  You contribute 6.2 percent of your income  Payments are calculated based on your 35 highest earning years, adjusted for inflation  You can collect the full amount of SS when you reach the full retirement age (currently 67)  If you delay claiming you will earn bigger checks  Married couples can get payments based on their own, or up to 50% of the higher earner

Why is Social Security Important?  Social Security is a main part of retirement planning  SS payments are likely to be less than income has been  Most retirees need to supplement through savings, investments, continued employment or adjusted lifestyle

Individual Retirement Accounts  An individual retirement account (IRA) is a personal savings account that allows you to set aside money for retirement  Usually up to $2000 a year  You do not pay taxes on the money deposited  You can withdraw money when you turn 59 ½ years old- money is taxed when withdrawn

Roth IRA  A Roth IRA has slightly different rules  Money that is put into a Roth IRA is taxed  Money that is taken out of a Roth IRA is not taxed once you turn 59 ½  A Roth IRA has income limits per year  Both a traditional and Roth IRA have penalties when withdrawals are made before 59 ½

401k and 403b  A 401k and 403b is a savings plan offered by an employer to an employee  The employee contributes a percentage of his or her earnings each pay period- this money is then invested in stocks, bonds, mutual funds, etc.  The employer will hire another company to manage your investment accounts  Typically companies will offer five or more mutual funds (pool of funds) to invest in  Some employers will match the contribution you make to your plan

401k and 403b  You do not pay income tax on the money you contribute  You pay taxes on the money you withdraw, starting at 59 ½  The basic difference is that a 403b is used by schools, non-profits, and religious groups  The law allows these organizations to be exempt from certain processes that apply to a 401k

Pension Plan  A pension plan is another retirement savings option in which employees set aside part of their paycheck  Employees do not have control of investment decisions with a pension plan  Contributions are made and the investment portfolio is completely controlled by the company  The company promises to provide a certain amount of income monthly to retired employees

Other Retirement Options  Annuity: when money is accumulated over time and then paid out over a set payment period  Keogh Plan: a tax deferred pension plan available to self-employed individuals

Retirement  Saving for retirement is a crucial step in making sure you can retire on time and do what you want once retired  Evaluating retirement plans requires knowledge of the costs and benefits of each type  For example, one cost of an IRA is the severe early-withdrawal fee, which is countered by the benefit of contributions reducing taxable income