Exam 14: Planning for Retirement

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -The social security administration [can | cannot] give you a fairly accurate estimate of benefits you can expect in the future.

Miles has no retirement plan at work.Therefore,$2,000 contributed to his regular IRA will be tax deductible.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -If your employer matches your 401(k)contributions,you should contribute at least [the maximum allowed for tax deferrable | the amount matched by your employer].

The cash balance retirement plan is being used to replace traditional define benefit plans.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -A defined [contribution | benefit] retirement plan would usually be better for a younger worker who changes employers every five years.

Employees of a nonprofit corporation can contribute to a(n)

The amount of your social security contribution depends on

Dr.Johnson is surgeon at University Hospital.She will pay ____ taxes on all of her $170,000 salary.

Social security benefits may be available to dependents of the retired,disabled,or deceased worker.

It really makes little difference whether you start retirement savings at age 25 or at age 45.

In the year 2027,a person will have to be ____ to be able to retire with full social benefits.

A vested employee has a right to receive benefits from an employer's retirement funds even if he no longer works there.

The major mistake(s)people make in retirement planning is(are)

What are the tax characteristics of qualified retirement plans?

There are early withdrawal penalties for all of the following except

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -The income base on which social security tax is computed [increases each year | remains the same for long periods of time].

With a non-contributory pension plan,the employer makes no financial contribution to the account.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -You are age 45 and healthy,and you are withdrawing money from your IRA.There [will | will not] be a tax penalty for doing this.

Traditional defined benefit plans are better suited than cash balance plans for a mobile workforce.

An investment vehicle that systematically pays out benefits over an extended period of time is a(n)