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8. Sally spends \$100 a week on groceries. If inflation averages 3.5 percent a year for the next 20 years, how much will those groceries cost Sally in 20 years?

A: Math makes me wince, but I know it's more than \$100.
We all have to be our own best financial adviser, and if you don't understand the impact inflation has on your family's finances, you're going to pay a steep price.

B: \$170.
Pretty good! While 3.5 percent times 20 years is indeed \$70 in interest, you're missing one important factor: compounding. Each year the 3.5 percent interest is added to an increasingly larger balance, so over the full 20 years, the total rise in costs will be more than \$170.

C: Nearly \$200.
Yep, the cost of living will nearly double in two decades if inflation averages 3.5 percent (which, by the way, it has, roughly, over the last 75 years). It's important to keep the impact of inflation in mind for retirement: Once you stop working, your portfolio would need to earn an average of 3.5 percent a year just to allow you to maintain your current standard of living.

9. Erica and James are in their 30s with one child and annual living expenses of \$38,000. James is a stay-at-home dad, and Erica has a great job that pays \$75,000 a year. She has a life insurance policy through work, with a death benefit equal to one year's salary. What size death benefit should they consider when purchasing additional life insurance?

A: 25 times their annual living expenses, or \$950,000.
You've been paying attention. My advice is to buy a term life policy with a death benefit equal to 25 times the family's annual living costs (SelectQuote and AccuQuote are two good online resources). But with this answer, you've prepared for only one death. What happens if James dies prematurely?

B: \$950,000 on Erica's life and an additional policy on James's life as well.
Excellent choice. All families need to think through what the added expenses would be if the stay-at-home parent were to die prematurely. Add those costs to the current annual living expenses, and the death benefit should be 25 times that new number.

C: They don't need to buy extra life insurance. The company policy is plenty.
That will barely cover two years of James's living expenses. And how would Erica cover childcare if James were to die? The policy through work is woefully inadequate.

10. What percentage of women who are 65 years old today will still be alive at 85?

A: 10 percent.

B: 25 percent.
Close, but you're still underestimating our average longevity.

C: 50 percent.
Right! This statistic should give you serious pause about planning for early retirement. If you stop work in your 50s, you may need your retirement savings (along with Social Security and any pensions) to support you for 30-plus years. That is asking a lot.

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