Exam 19: Retirement Planning

When deciding whether to invest in a traditional IRA or a Roth IRA one would consider all of the following, except

With which of the following plans will you be able to most accurately predict your retirement income?

To be eligible for Social Security retirement benefits on your own, you will need to have worked for the equivalent of at least 10 years (amassed 40 credits), earned the minimum required income each quarter, and contributed to Social Security through payroll taxes.

To qualify for Social Security benefits, your income has to be at least ________ per quarter (in 2018) for the equivalent of 10 years.

How much could a self-employed individual earning $187,000 per year accumulate in a SEP plan if the individual invests the maximum allowed for 20 years at a return of 9%? Round to the nearest dollar if needed.

An ESOP (employee stock ownership plan) is generally more risky than retirement plans invested in diversified mutual funds.

Which of the following employers would be most likely to offer a 403(b) plan?

Which of the following investments is least likely to be allowed with most defined-contribution plans?

Dave and Tammy are both employed but are eligible to contribute to a traditional IRA. If they each contribute $5,500 to their respective accounts, how much federal income tax will they save if they are in the 32% marginal tax bracket?

Both the SEP (Simplified Employee Pension) and the SIMPLE (Savings Incentive Match Plan for Employees) retirement plans are intended for use by smaller firms.

Which of the following is a defined-contribution plan intended for firms with 100 or fewer employees?

In the past 20 years or so, many employers have shifted from defined-benefit to defined-contribution retirement plans.

Social Security benefits are ________, as are Social Security ________ on your income.

In the last 20 years, many employers have shifted from

What would be the difference in the tax consequences of an $18,000 withdrawal from a Roth IRA versus a traditional IRA if $15,000 represents long-term capital gains, $2,000 is short-term capital gains, and $1,000 is interest? Assume a tax rate of 30% and a capital gains tax rate of 10%.

Your riskiest choice as an investment option for your 401(k) would be

The traditional IRA allows tax-deductible contributions of up to $5,500 ($6,500 for those age 50 or older) in 2018 for individuals who are not covered by employer-sponsored retirement plans or meet income qualifications if they have an employer plan.

If you are allowed to change investments in your retirement plan over time, you have a(n) ________ plan.

It is often a good idea to invest most or all of your retirement savings in the stock of your employer so that you will demonstrate your loyalty.

In determining the amount of income you will need for retirement, you should consider all of the following, except