Question

____ tends to increase and then decrease over the life cycle.

Select one:

a. Income

b. Retirement

c. None of choices

d. Emergency funds

e. Both income abd emergency funds

Answer 1

Debt and Income are two things that first increase and then decrease over the life cycle. After Graduation one starts earning by doing a job which leads to him buying a car/home on loan increasing the debt. A person's income always increases until retirement with salary increments. With increase in income, person pays his loans quickly reducing the loan. After retirement income drastically reduces.

Wherese as an emergency fund is an essential corpus/contingency fund that one should keep aside to tackle emergencies.At first income stage emergency fund will have the first claim on your savings after that it either increase or remains constant over lifecycle.

Hence a. Income tends to increase and then decrease over the life cycle.