Starting a Pension at Eighteen · seed 1 · A4, ink-friendly. The answer key prints on its own page for grown-ups.

Start your pension at eighteen

Life Skills · Money & Finance · ages 16-18
Name ______________________   Date ____________

  1. Why does money saved at eighteen beat money saved much later?

    • Banks pay eighteen year olds triple rates
    • Early money compounds the longest
    • Old coins are worth more than new ones

  2. What is compound interest in one sentence?

    • Growth earning its own growth
    • A fee the bank charges monthly
    • A tax on savings accounts

  3. Declining your employer's pension match leaves free pay unclaimed.

    Circle one:   True   False

  4. What should you do before investing for a pension?

    • Wait until you feel rich
    • Clear expensive debt first
    • Borrow more to invest bigger sums

  5. What does a one percent yearly fee do over forty years?

    • It doubles the final pot through compounding
    • Almost nothing, since one percent is tiny
    • It can take roughly a quarter of the final pot

  6. Which fund choice fits an eighteen year old best?

    • A broad index fund with tiny fees
    • A costly fund that trades constantly
    • Keeping everything as cash forever

  7. Your pay rises. How do you handle the pension contribution?

    • Raise it, keeping lifestyle flat while the pot accelerates
    • Spend the whole rise and freeze the contribution
    • Stop the pension now that you earn more

  8. Two savers pay the same monthly sum at the same growth rate. One starts at twenty, one at forty. Why is the gap so large?

    • Older savers are taxed at triple the rate
    • Banks refuse accounts to savers over forty
    • The early saver's money compounds for twice as long
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Answer key

For grown-ups. Fold this page away before handing over the rest.

Start your pension at eighteen W1-mt_mGfpMq2IAW-s1

  1. Early money compounds the longest · Time in the market does the heavy lifting.
  2. Growth earning its own growth · Each year's growth joins the pot and earns its own growth.
  3. True · Matched money is part of your pay for contributing.
  4. Clear expensive debt first · No investment reliably beats high interest working against you.
  5. It can take roughly a quarter of the final pot · Small percentages over long times move fortunes against you.
  6. A broad index fund with tiny fees · Your edge is decades of compounding plus low costs, not stock picking.
  7. Raise it, keeping lifestyle flat while the pot accelerates · Boring systems outperform brilliant intentions.
  8. The early saver's money compounds for twice as long · Each early contribution grows for the full run to retirement.
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