Question 1

Self-employed workers pay twice as much for Social Security coverage compared to employed workers.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A)  59 
B)  62 
C)  65 
D)  67 
E)  72 
A)  59 
B)  62 
C)  65 
D)  67 
E)  72

Question 3

Will works for Micro Lance Computer Company and participates in its thrift and savings plan.For every $1.00 Will contributes to the plan,up to 5 percent of his salary,the company contributes $0.25.If Will's salary is $40,000 and he decides to maximize the matching contributions,how much will be contributed to Will's plan in a year by both the employer and Will?

Accepted Answer

A)  $4,000 
B)  $3,500 
C)  $2,500 
D)  $2,000 
E)  $1,000 
A)  $4,000 
B)  $3,500 
C)  $2,500 
D)  $2,000 
E)  $1,000

Question 4

The major financial benefit of beginning your retirement funding early is related to

Accepted Answer

A)  increased cost of living. 
B)  compound interest. 
C)  reduced anxiety. 
D)  inflation. 
E)  investment returns. 
A)  increased cost of living. 
B)  compound interest. 
C)  reduced anxiety. 
D)  inflation. 
E)  investment returns.

Question 5

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.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 6

In short-term retirement planning you estimate the required level of retirement income as a percentage of current income,fund that amount,and then adjust that number every 3 to 5 years.

Accepted Answer

A) True 
 B)False

Question 7

Government research indicates that about 60 percent of households approaching retirement age have 401(k)accounts.

Accepted Answer

A) True 
 B)False

Question 8

In order to avoid penalties,one must typically start taking minimum distributions from most retirement accounts by age

Accepted Answer

A)  50. 
B)  59 ¹/₂ . 
C)  65 
D)  70 ¹/₂ . 
E)  75 
A)  50. 
B)  59 ¹/₂ . 
C)  65 
D)  70 ¹/₂ . 
E)  75

Question 9

Tax-free earnings can be gotten from investments in

Accepted Answer

A)  Roth IRAs. 
B)  Traditional IRAs. 
C)  SEP plans. 
D)  401(k) plans. 
E)  All of the above 
A)  Roth IRAs. 
B)  Traditional IRAs. 
C)  SEP plans. 
D)  401(k) plans. 
E)  All of the above

Question 10

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.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 11

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].

Accepted Answer

The answer of Choose the word or phrase in [...

Question 12

The median household approaching retirement has less than 25 percent of the money needed to maintain their standard of living in retirement.

Accepted Answer

A) True 
 B)False

Question 13

The third step in retirement planning is to formulate an investment program.

Accepted Answer

A) True 
 B)False

Question 14

Danielle puts 8 percent of her paycheck in a 401(k)plan administered by her employer.Danielle earns $55,000 per year and is in the 28 percent tax category.What annual tax savings does she get from her contribution? If her employer matches contributions on the first 5% of her salary dollar for dollar and the second 5% 50 cents on the dollar,how much will her employer put into her account this year? (Show all work.)

Accepted Answer

Contribution = .08 * $55,000 = $4,400
Ta

Question 15

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 [Roth | traditional] IRA is typically recommended for people in their 30s or 40s.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 16

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.
-Under a defined benefit pension plan,an employee [is | is not] able to estimate what his pension payment would be upon retirement.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 17

Employee contributions to ____ plans do not reduce taxable income.

Accepted Answer

A)  403(b) 
B)  Thrift and savings 
C)  457 
D)  401(k) 
E)  a, b, and c 
A)  403(b) 
B)  Thrift and savings 
C)  457 
D)  401(k) 
E)  a, b, and c

Question 18

The amount of your social security contribution depends on

Accepted Answer

A)  age and income. 
B)  income and current tax rate. 
C)  age and current tax rate. 
D)  current income and retirement income goal. 
E)  employer's contribution and current tax rate. 
A)  age and income. 
B)  income and current tax rate. 
C)  age and current tax rate. 
D)  current income and retirement income goal. 
E)  employer's contribution and current tax rate.

Question 19

The biggest unknown factor that retirees have when estimating their retirement needs and income is

Accepted Answer

A)  social security. 
B)  inflation. 
C)  pension benefits. 
D)  expenditures. 
E)  retirement age. 
A)  social security. 
B)  inflation. 
C)  pension benefits. 
D)  expenditures. 
E)  retirement age.

Question 20

Mandy and Michael Tombs are retiring soon.Their projected month Social Security benefits are $800 and $1,800,respectively.Assuming they are married and they select the best benefit alternative for them,how much will they receive monthly?

Accepted Answer

A)  $ 800 
B)  $1,200 
C)  $1,800 
D)  $2,600 
E)  $2,700 
A)  $ 800 
B)  $1,200 
C)  $1,800 
D)  $2,600 
E)  $2,700

Self-employed workers pay twice as much for Social Security coverage compared to employed workers.

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

The major financial benefit of beginning your retirement funding early is related to

In short-term retirement planning you estimate the required level of retirement income as a percentage of current income,fund that amount,and then adjust that number every 3 to 5 years.

Government research indicates that about 60 percent of households approaching retirement age have 401(k)accounts.

In order to avoid penalties,one must typically start taking minimum distributions from most retirement accounts by age

Tax-free earnings can be gotten from investments in

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].

The median household approaching retirement has less than 25 percent of the money needed to maintain their standard of living in retirement.

The third step in retirement planning is to formulate an investment program.

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 [Roth | traditional] IRA is typically recommended for people in their 30s or 40s.

Employee contributions to ____ plans do not reduce taxable income.

The amount of your social security contribution depends on

The biggest unknown factor that retirees have when estimating their retirement needs and income is

Mandy and Michael Tombs are retiring soon.Their projected month Social Security benefits are $800 and $1,800,respectively.Assuming they are married and they select the best benefit alternative for them,how much will they receive monthly?

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Preserving Your Estate

Filters

Exam 14: Planning for Retirement

Self-employed workers pay twice as much for Social Security coverage compared to employed workers.

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

The major financial benefit of beginning your retirement funding early is related to

In short-term retirement planning you estimate the required level of retirement income as a percentage of current income,fund that amount,and then adjust that number every 3 to 5 years.

Government research indicates that about 60 percent of households approaching retirement age have 401(k)accounts.

In order to avoid penalties,one must typically start taking minimum distributions from most retirement accounts by age

Tax-free earnings can be gotten from investments in

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].

The median household approaching retirement has less than 25 percent of the money needed to maintain their standard of living in retirement.

The third step in retirement planning is to formulate an investment program.

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 [Roth | traditional] IRA is typically recommended for people in their 30s or 40s.

Employee contributions to ____ plans do not reduce taxable income.

The amount of your social security contribution depends on

The biggest unknown factor that retirees have when estimating their retirement needs and income is

Mandy and Michael Tombs are retiring soon.Their projected month Social Security benefits are $800 and $1,800,respectively.Assuming they are married and they select the best benefit alternative for them,how much will they receive monthly?

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Preserving Your Estate

Filters