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. -Judy,age 68,is receiving social security benefits.She received $45,000 in consulting income this year.Her social security benefits [will | will not] be reduced because of these earnings.

Once you begin drawing social security benefits,you will receive a fixed level of income for the remainder of your life.

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 can expect to spent [more | fewer] years in retirement than you spent in your parent's home.

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. -In general,the tax law changes made in 2001 [increased | decreased] the tax advantages for retirement accounts.

The two most common sources of retirement income for most people are social security and pensions.

When estimating retirement needs,you use the before-retirement investment return rate to adjust the current dollar shortfall to the actual shortfall at retirement.

IRA withdrawals can be made without tax penalty any time after you reach the age of 59 1/2.

Major sources of retirement income include

If you work nine years under the social security system,you are

Even the best retirement plan needs to be reviewed every few years.

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. -There is a [5% | 10%] federal income tax penalty for pension plan withdrawals before age 59.

Persons 50 and over are able to make larger contributions to IRAs than younger persons.

Lillian has a defined benefit plan that promises an annual retirement benefit based on the average of her last three years of salary times 2 times years of service.At retirement Lillian has 15 years of service and an average salary over the last 3 years of $65,000.What will her annual benefit be?

Retirement plan portability is characterized by one's ability to move retirement plan investments from one investment to another investment while working for the company.

Social security is meant to be a retirement income supplement.

Investment returns on annuities have outperformed mutual fund returns over the past five year.

The first step in retirement planning is to

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. -Inflation will have [little | great] impact on your retirement 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. -The first step in retirement planning is to [set retirement goals | decide how much money you cam afford to set aside for retirement].

Having an accurate current income and expenditures statement would be very useful when calculating retirement needs.