23 | Retirement planning

Today you will learn 5 new English words related to "Retirement planning"

Author

SEWT Team
April 25, 2025

“Retirement planning” is a crucial topic for you, an ESL learner, especially if you’re considering long-term financial goals. This topic can help you develop financial literacy, set realistic goals, and make informed decisions about your future. By learning the vocabulary here today, you can effectively communicate with financial advisors, understand investment strategies, and take control of your financial future. So, let’s jump right in!

5 TERMS

  1. Pension (Noun): A regular payment made by an employer or government to an employee after retirement, typically based on their earnings and years of service.

  2. Investment (Noun): The act of putting money into financial products (stocks, bonds, real estate, etc.) with the expectation of gaining returns in the future.

  3. 401(k) (Noun): A tax-deferred retirement savings plan offered by many employers in the United States, where employees can contribute a portion of their salary.

  4. IRA (Individual Retirement Account) (Noun): A tax-advantaged account that individuals can use to save for retirement, which comes in various types like Traditional and Roth IRAs.

  5. Social Security (Noun): A U.S. government program that provides financial assistance to retirees, the disabled, and survivors of deceased workers.

EXAMPLE SENTENCES

  1. Pension

    • Many employees rely on their pension as a primary source of income after retirement.

    • His company offers a generous pension plan that guarantees financial security in his retirement years.

    • It's important to understand how much you can expect from your pension when planning for retirement.

  2. Investment

    • Diversifying your investments is key to minimizing risk as you plan for retirement.

    • She decided to increase her investments in index funds to ensure steady growth for her retirement fund.

    • Retirement planning often involves balancing investments in stocks and bonds to generate reliable income.

  3. 401(k) 

    • A 401(k) allows employees to save for retirement while benefiting from tax advantages.

    • He contributes 10% of his salary to his 401(k) plan each month.

    • Many employers match contributions to a 401(k) up to a certain percentage, which can help grow your retirement savings.

  4. IRA (Individual Retirement Account)

    • Contributing to a Roth IRA allows you to take advantage of tax-free withdrawals in retirement.

    • A Traditional IRA provides tax deductions on contributions, but taxes are paid when the funds are withdrawn.

    • It’s important to choose the right type of IRA based on your retirement goals and tax situation.

  5. Social Security

    • Many retirees rely on Social Security as a part of their retirement income.

    • Social Security benefits are based on your lifetime earnings and the number of years you worked.

    • It’s important to understand when to start taking Social Security benefits to maximize your retirement income.

EXAMPLE PARAGRAPH

Retirement planning involves careful consideration of various factors, including social security benefits, investment strategies, and retirement accounts like IRAs and 401Ks. A pension plan, if available, can provide a significant source of income during retirement. By understanding these financial tools and making informed decisions, individuals can work towards a secure and comfortable retirement.

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