1)Identify and briefly discuss the three biggest

mistakes people tend to make when setting up

retirement programs
The three biggest mistakes that people make in
retirement planning are:

a. They start too late.

b. They put away too little.
c. They invest too conservatively
Many people simply do not start thinking about retirement until
they are in their 40s or 50s; by then, it may be too late to
produce the kind of retirement nest egg they want.
As a result, many people just have to make do with less in
retirement. Likewise, people do not put enough away for
retirement. Obviously, the less we put away prior to retirement,
the less we are going to have in retirement.
Finally, too many people treat their retirement plans like savings
accounts rather than investment vehicles by placing most (or all)
of their retirement funds in low-yielding, fixed-income securities
(like Treasury securities and bank CDs). As a result, people end
up earning dismal rates of return on their money.
All three mistakes become doubly important when we
introduce compound interest, because compounding
magnifies the impact of these mistakes.
In compounding, we are essentially letting our money
work for us. Naturally, the less there is to work with, the
less we will have in the future.
Obviously, when it comes to retirement planning, it pays
to start early, save a lot, and invest your money at
reasonably aggressive rates of return.
2) What are the most important sources of
retirement income?
 2) What are the most important sources of
retirement income?
The most important sources of retirement income are:
(I) Social Security,
(ii)personal assets (savings, investments, self-directed
retirement plans), and
(iii)employer-sponsored retirement plans.

While Social Security may be the most common source,

it does not necessarily provide the largest dollar
amount.
3) Discuss the relationship of retirement planning
to financial planning
Retirement planning is a key element in the
financial planning process.

Retirement planning is a long-term process that

involves a strategy of systematically
accumulating funds for retirement.

Retirement planning captures the very essence of

financial planning. It is forward-looking, has an
impact on current and future standards of living,
and, if successful, can be very rewarding.