Payday, Someday
Your new job offers this retirement plan, named after a section of the tax code. Your employer might even match the money you put in.
What is a 401(k)?
This federal program sends monthly checks to retired workers. You need its 9-digit card number to get your first job.
What is Social Security (the Social Security System)?
Instead of spending your birthday money, you put it in the bank to use later. That money is your ____.
What is savings?
Buy one share of this, and you own a small piece of a company like Nike or Apple.
What is stock?
The original amount of money you put into an account is called the ____. It’s spelled the same as the title of the person who runs your school.
What is principal?
Grandma puts $50 in your birthday card, and she expects nothing back. That money is a ____.
What is a gift?
You can open this retirement account on your own, with no employer needed. It comes in two types: Traditional and Roth.
What is an IRA (Individual Retirement Account)?
Your first pay stub shows money taken out for Social Security and Medicare under this 4-letter abbreviation. “Who is ____, and why is she taking my money?”
What is FICA (Federal Insurance Contributions Act)?
You promise the bank you’ll leave your money alone for one year, and it pays you extra interest. Take it out early and you pay a penalty. Name this 2-letter account.
What is a CD (Certificate of Deposit)?
Land, houses, and office buildings are all this type of investment. Monopoly is basically a game about it.
What is real estate?
You earn interest on your money AND on the interest you already earned, so it snowballs. This is called ____ interest.
What is compound interest?
When a relative passes away and leaves you money or property, you receive an _______.
What is an inheritance?
Grandpa’s old company still sends him a check every month. The company set up this account to pay retirement benefits to its workers.
What is a pension fund?
Workers pay into Social Security for years. When they retire or become disabled, they receive these monthly payments.
What are benefits?
Your bank has ATMs on every corner and an app for depositing checks from home. That means it scores high in ____: how easy it is to get to your money.
What is convenience?
When you buy one of these, you are lending money to a company or the government. They promise to pay you back, with interest, by a certain date.
What is a bond?
You buy $500 sneakers on a credit card, but you end up paying $560. The extra $60 in interest and fees is called ____ charges.
What are finance charges (fees)?
Investors take risks because they hope to earn this: the benefit or return on an investment. Finish the phrase “risk vs. ____.”
What is reward?
Jordan works for herself as a photographer, so she has no company 401(k). This tax-deferred retirement plan was made for self-employed people like her.
What is a Keogh plan?
Devon puts $100 of his paycheck into his 401(k) BEFORE any taxes are taken out. That money went in ____-____.
What is pre-tax?
This account earns interest like a savings account and works a lot like a checking account, but it may limit how many withdrawals you make. It’s a ____ ____ account.
What is a money market account?
Thousands of investors pool their money, and a professional manager uses it to buy many different stocks and bonds for all of them. This is a ____ ____.
What is a mutual fund?
Divide this number by your interest rate, and you’ll know about how many years it takes your money to double. Name the rule.
What is the Rule of 72?
You buy a share of stock for $40 and sell it later for $55. That $15 profit is an example of market ____.
What are market gains?
Ms. Rivera pays an insurance company every month for 20 years. Then it flips, and the company pays HER every month for the rest of her life. This contract is called an ____.
What is an annuity?
When the U.S. government needs to borrow money, it sells these to investors. They come as bills, notes, and bonds.
What are Treasury securities?
Cash in your wallet can be spent right now, but a house can take months to sell. ____ measures how quickly something can be turned into cash.
What is liquidity?
Some mutual funds charge a sales fee when you buy or sell shares. This fee is called a ____. Funds that don’t charge one are called “no-____” funds.
What is a load?
You lock your money into a CD that pays 2%. A month later, banks start paying 5%, but you’re stuck at 2%. This is called interest ____ risk.
What is interest rate risk?
Your stock was worth $1,000. Then the whole stock market dropped, and now it’s worth $700. That $300 drop is a market ____.
What is a market loss?