Exam 14: Planning for Retirement

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 withdraw [your contribution | the total balance] of your Roth IRA at any time without penalty.

Gordon and Lisa estimate that they will need $1,875,000 in 40 years for their retirement years.If they can earn 8 percent annually on their funds,how much do they need to save annually?

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. -Money to make social security benefit payments comes from contributions from [employees only | employers only | employees and employers].

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.

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.

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.

For most workers,participation in the social security system is mandatory.

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 have just begun working at ABC Corporation.Participation in the company's 401(k)plan will probably be [voluntary | mandatory].

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

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 a Roth 401(k),contributions [are | are not] tax deductible.

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 employee will be responsible for making investment choices when the employer offers a [401(k)plan | defined benefit plan].

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. -Most people invest their retirement funds too [aggressively | conservatively].

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.

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. -Lois,age 67,is receiving social security benefits.She received $25,000 in interest and dividends this year.Her social security benefits [will | will not] be reduced because of these earnings.

Which is not a common mistake people make when planning for retirement?

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].

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 major source of retirement income for current retirees is [Social Security | personal savings].

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.

The cost of an annuity is greater for females than it is for males.

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