Question 1

If an annuity plan is designed so that the monthly payment is adjusted by the actual investment experience of the insurer, it is a(n):

Accepted Answer

A) guaranteed-minimum annuity. 
B) equity annuity. 
C) variable annuity. 
D) uncertain annuity. 
E) temporary annuity. 
A) guaranteed-minimum annuity. 
B) equity annuity. 
C) variable annuity. 
D) uncertain annuity. 
E) temporary annuity.

Question 2

You will receive the largest monthly payment under an annuity contract when the annuity disbursement option is the:

Accepted Answer

A) life annuity with no refund. 
B) life annuity for a certain period. 
C) refund annuity. 
D) annuity certain. 
E) temporary life annuity. 
A) life annuity with no refund. 
B) life annuity for a certain period. 
C) refund annuity. 
D) annuity certain. 
E) temporary life annuity.

Question 3

Melissa's retirement plan is described in her employee handbook as follows: Noncontributory
Cliff vesting (100%)after 3 years of full-time employment
Monthly retirement benefits based on average salary over the last 3 years of employment and the total number of years worked for the company
Which of the following statements about this retirement plan is true?

Accepted Answer

A) Melissa will have to pay money into the plan. 
B) If Melissa leaves this company before working full time for 3 years, she will not receive any benefits. 
C) Melissa will have to make investment decisions regarding her retirement plan. 
D) Melissa's retirement plan is a defined contribution plan. 
E) For Melissa, vesting takes place gradually over the first 3 years of employment. 
A) Melissa will have to pay money into the plan. 
B) If Melissa leaves this company before working full time for 3 years, she will not receive any benefits. 
C) Melissa will have to make investment decisions regarding her retirement plan. 
D) Melissa's retirement plan is a defined contribution plan. 
E) For Melissa, vesting takes place gradually over the first 3 years of employment.

Question 4

Planning for retirement over a series of short-run time frames requires:

Accepted Answer

A) stating your retirement income objectives as a percentage of your present earnings. 
B) the retiree to wait until age 50 to start planning. 
C) annual savings of at least $100,000. 
D) investment of retirement funds in more risky investments. 
E) estimating the inflation factor by reducing inflation projections. 
A) stating your retirement income objectives as a percentage of your present earnings. 
B) the retiree to wait until age 50 to start planning. 
C) annual savings of at least $100,000. 
D) investment of retirement funds in more risky investments. 
E) estimating the inflation factor by reducing inflation projections.

Question 5

Lillian has a defined benefit plan that promises an annual retirement benefit based on 2% of her final 3-year average annual salary for each year of service. At retirement, Lillian has 15 years of service and had an average salary of $80,000 over the last 3 years. What is the amount of her annual benefit?

Accepted Answer

A) $65,000 
B) $50,500 
C) $35,400 
D) $24,000 
E) $0 
A) $65,000 
B) $50,500 
C) $35,400 
D) $24,000 
E) $0

Question 6

Marshall will need $1,250,000 in his retirement fund in 40 years at the time of his retirement. If Marshall can earn 8% annually over this period, how much does Marshall need to save annually to meet that goal? (Show all work.)

Accepted Answer

Future value annuity factor for 40 years

Question 7

The average level of Social Security benefits for retirees aged 67 and above is adjusted upward each year with subsequent increases in the:

Accepted Answer

A) retirees' income. 
B) number of dependents. 
C) quality of life. 
D) cost of living. 
E) preretirement cost of living. 
A) retirees' income. 
B) number of dependents. 
C) quality of life. 
D) cost of living. 
E) preretirement cost of living.

Question 8

Profit-sharing plans enable employees to participate in the earnings of their employer.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

In the year 2027, a person will have to be a minimum of _____ years to be able to retire with full social benefits.

Accepted Answer

A) 59 
B) 62 
C) 64 
D) 67 
E) 72 
A) 59 
B) 62 
C) 64 
D) 67 
E) 72

Question 11

In which of the following procedures does vesting take place gradually over the first 6 years of employment?

Accepted Answer

A) Cliff vesting 
B) Contributory vesting 
C) Self-directed schedule 
D) Graded schedule 
E) Maximum vesting 
A) Cliff vesting 
B) Contributory vesting 
C) Self-directed schedule 
D) Graded schedule 
E) Maximum vesting

Question 12

Many people tend to be too conservative when investing their retirement funds.

Accepted Answer

A) True 
 B)False

Question 13

Retirement planning starts with:

Accepted Answer

A) determining the size of the required nest egg. 
B) considering the longevity of the retiree. 
C) defining the investment program. 
D) determining the interest on income-earning assets. 
E) setting retirement goals. 
A) determining the size of the required nest egg. 
B) considering the longevity of the retiree. 
C) defining the investment program. 
D) determining the interest on income-earning assets. 
E) setting retirement goals.

Question 14

Bill has worked for Excellent Corp. for 4 years. During this period, Excellent Corp. has contributed $25,000 to his retirement plan. Assuming the company uses graded vesting, how much will Bill be able to roll into an individual retirement account (IRA)if he leaves Excellent Corp. at the end of 4 years?

Accepted Answer

A) $0 
B) $5,000 
C) $10,000 
D) $15,000 
E) $20,000 
A) $0 
B) $5,000 
C) $10,000 
D) $15,000 
E) $20,000

Question 15

The Employee Retirement Income Security Act (ERISA)was established to provide:

Accepted Answer

A) funding for retirement plans. 
B) the ability to retain the same retirement insurance when employees change employers. 
C) mandatory retirement plans for self-employed individuals. 
D) protection to employees participating in private employer retirement plans. 
E) individual trust funds for employees retiring from jobs in the federal government. 
A) funding for retirement plans. 
B) the ability to retain the same retirement insurance when employees change employers. 
C) mandatory retirement plans for self-employed individuals. 
D) protection to employees participating in private employer retirement plans. 
E) individual trust funds for employees retiring from jobs in the federal government.

Question 16

Workers who elect to retire early-at age 72-will receive reduced Social Security retirement benefits.

Accepted Answer

A) True 
 B)False

Question 17

Danielle puts 8% of her paycheck in a 401(k)plan administered by her employer. Danielle earns $55,000 per year and is in the 28% 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 next 3% with 50 cents for every dollar, how much will her employer put into her account this year? (Show all work.)

Accepted Answer

Contribution = 0.08 × $55,000 = $4,400

Question 18

Harry starts receiving reduced retirement benefits at age 62. These benefits:

Accepted Answer

A) increase when he reaches the normal retirement age. 
B) are not subject to federal income taxes. 
C) are deducted from the future benefits he will receive after age 67. 
D) increase the tax deductions available to him. 
E) remain the same when he reaches the normal retirement age. 
A) increase when he reaches the normal retirement age. 
B) are not subject to federal income taxes. 
C) are deducted from the future benefits he will receive after age 67. 
D) increase the tax deductions available to him. 
E) remain the same when he reaches the normal retirement age.

Question 19

One of the biggest financial benefits of starting early to save for your retirement fund is related to:

Accepted Answer

A) the increased cost of living. 
B) compound interest. 
C) lower tax deductions. 
D) inflation. 
E) reduced expenses. 
A) the increased cost of living. 
B) compound interest. 
C) lower tax deductions. 
D) inflation. 
E) reduced expenses.

Question 20

Jamie has worked for ABC Printing for 5 years. During this period, ABC Printing has contributed $25,000 to her noncontributory retirement plan. Assuming ABC uses cliff vesting, the longest period allowed, how much will Jamie be able to roll into an individual retirement account (IRA)if she leaves ABC Printing?

Accepted Answer

A) $0 
B) $5,000 
C) $10,000 
D) $20,000 
E) $25,000 
A) $0 
B) $5,000 
C) $10,000 
D) $20,000 
E) $25,000

If an annuity plan is designed so that the monthly payment is adjusted by the actual investment experience of the insurer, it is a(n):

You will receive the largest monthly payment under an annuity contract when the annuity disbursement option is the:

Planning for retirement over a series of short-run time frames requires:

Marshall will need $1,250,000 in his retirement fund in 40 years at the time of his retirement. If Marshall can earn 8% annually over this period, how much does Marshall need to save annually to meet that goal? (Show all work.)

The average level of Social Security benefits for retirees aged 67 and above is adjusted upward each year with subsequent increases in the:

Profit-sharing plans enable employees to participate in the earnings of their employer.

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

In the year 2027, a person will have to be a minimum of _____ years to be able to retire with full social benefits.

In which of the following procedures does vesting take place gradually over the first 6 years of employment?

Many people tend to be too conservative when investing their retirement funds.

Retirement planning starts with:

The Employee Retirement Income Security Act (ERISA)was established to provide:

Workers who elect to retire early-at age 72-will receive reduced Social Security retirement benefits.

Harry starts receiving reduced retirement benefits at age 62. These benefits:

One of the biggest financial benefits of starting early to save for your retirement fund is related to:

Understanding the Financial 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, Etfs, and Real Estate

Preserving Your Estate

Filters

Exam 14: Planning for Retirement

If an annuity plan is designed so that the monthly payment is adjusted by the actual investment experience of the insurer, it is a(n):

You will receive the largest monthly payment under an annuity contract when the annuity disbursement option is the:

Planning for retirement over a series of short-run time frames requires:

Marshall will need $1,250,000 in his retirement fund in 40 years at the time of his retirement. If Marshall can earn 8% annually over this period, how much does Marshall need to save annually to meet that goal? (Show all work.)

The average level of Social Security benefits for retirees aged 67 and above is adjusted upward each year with subsequent increases in the:

Profit-sharing plans enable employees to participate in the earnings of their employer.

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

In the year 2027, a person will have to be a minimum of _____ years to be able to retire with full social benefits.

In which of the following procedures does vesting take place gradually over the first 6 years of employment?

Many people tend to be too conservative when investing their retirement funds.

Retirement planning starts with:

The Employee Retirement Income Security Act (ERISA)was established to provide:

Workers who elect to retire early-at age 72-will receive reduced Social Security retirement benefits.

Harry starts receiving reduced retirement benefits at age 62. These benefits:

One of the biggest financial benefits of starting early to save for your retirement fund is related to:

Understanding the Financial 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, Etfs, and Real Estate

Preserving Your Estate

Filters