Exam 14: Planning for Retirement

Marcia works for Telephonic Industries and participates in its thrift and savings plan.For every $1.00 Marcia contributes to the plan,up to 4 percent of her salary,the company contributes $0.50.Which of the following accurately describe this plan?

ERISA was passed to protect employees participating in private employer retirement plans.

Employer matching contributions are common with ____ 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 costs of investing in a variable annuity is typically [higher | lower] than investing in mutual funds.

Fully insured status requires 40 ____ of employment covered by social security.

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. -Vested rights are [forfeitable | non-forfeitable] rights to receive some pension benefits.

Eligibility requirements for pension and retirement plans are typically determined by the employee's age and years of service.

Anyone with earned income can contribute to some type of IRA.

Government assistance,primarily Social Security,is the largest single source of income for the average retiree.

A graded vesting schedule would legally have to give you some vesting rights if you worked at a company for 2 or more years.

Early withdrawal of funds from an annuity may result in IRS penalties and

Upon retirement,married couples automatically receive 1.5 times the higher earning spouse's Social Security benefit.

The current trend in retirement plans is towards contributory plans.

A major advantage of an annuity is that you cannot outlive your financial resources.

At the same time as employers are cutting back on traditional pension plans,more are offering 401(k)plans.

Reduced early retirement benefits can be received at age 60.

Minimum distributions are not required from

Attractive features of a 401(k)plan can include

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. -[SEP | Keogh] plans are easier to establish.

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. -Harry starts taking reduced retirement benefits at age 62.Those benefits [will | will not] be increased when he reaches normal retirement age.