Succeeding in the World of Work

Section 1: Saving and Investing

After You Read Section Review Answers

Review Key Concepts

1. Savings accounts are accounts through which a financial institution pays you interest on the money you have deposited. Investments are financial products you purchase to make your assets grow; these can include savings bonds, money market accounts, and certificates of deposit (CD).Retirement plans allow you to put money away to withdraw after you retire; these can include pension plans, 401(k) plans, and individual retirement accounts (IRA).
2. In a defined-benefit plan, a company pays a fixed amount at retirement, while in a defined-contribution plan, the employer contributes a set amount each year, to be paid out at retirement.
3. Retirement plan options for the self-employed include a Keogh plan and a simplified employee pension (SEP).

4. Yasmin can make $100 more a year with a money market account ([$5,000 x 0.4] – [$5,000 x .02]).