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. -For most people,participation in the social security system is [voluntary | mandatory].

You would most likely purchase an annuity from an insurance company.

Profit sharing plans allow flexible employer contributions to the plan.

Bill has worked for White Drywall for 4 years.During this period White Drywall has contributed $25,000 to his retirement plan.Assuming the company uses graded vesting,how much will Bill be able to roll into an IRA if he left White Drywall at the end of 3 years?

A person who is self-employed on a part-time basis can qualify for a Keogh 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. -A defined [contribution | benefit] retirement plan would usually be better for an older worker who has been employed for a long time with the same employer.

You would most likely purchase an annuity from a bank.

Annuities are administered by

Melissa's retirement plan is described in her employee handbook as follows: Which of the following statements about this retirement plan is(are)true?

Normal retirement age is typically defined as ____ years of age.

By itself,Social Security is sufficient allow a worker and spouse to maintain their preretirement standard of living.

Like Keogh Plans,SEP plans are only for self-employed persons with no employees.

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. -With a [fixed rate | variable] annuity,you would receive a guaranteed payment regardless of the investment activity of the investment funds.

A ____ plan combines some of the features of a defined contribution plan with features of a defined benefit plan to produce a plan that is more portable than a traditional defined benefit plan.

The first step in retirement planning is to identify retirement goals.

One often has to make investment decision if you have a ____ plan.

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. -Beginning to put aside retirement funds at age 35 instead of 45 will make [very little | a great] difference in your total accumulated funds.

The employer retirement plan that is intended to promote employee productivity and allows the employer to vary the amount of annual contributions is a

One can contribute up to $10,000 annually to a 401(k)plan.

Roth IRAs are the only IRAs that have the potential to produce tax-free earnings.