Question 1

In recent years, earned income has accounted for a growing amount of total retirement income.

Accepted Answer

A) True 
 B)False

Question 2

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 cash-balance plan [ does | does not ] guarantee a benefit payout at retirement.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 3

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 4

Younger persons are able to make larger contributions to traditional individual retirement accounts (IRAs) than persons 50 and over.

Accepted Answer

A) True 
 B)False

Question 5

It is possible to convert a traditional individual retirement account (IRA) to a Roth IRA.

Accepted Answer

A) True 
 B)False

Question 6

A person who is self-employed on a part-time basis can qualify for a Keogh account.

Accepted Answer

A) True 
 B)False

Question 7

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. 
All earnings generated in an employee's account accumulate on a [ tax-free | tax-deferred ] basis in a Roth 401(k) plan.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 8

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 guaranteed-minimum annuity, the benefits [ are limited to the annuitant only | extend to named beneficiaries ].

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 9

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 10

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 an individual retirement account (IRA), the [ account owner | institution ] is the trustee.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 11

The best way to handle individual retirement account (IRA) rollovers is to arrange for the transfer of funds from one firm to another.

Accepted Answer

A) True 
 B)False

Question 12

A major advantage of most types of annuities is that you cannot outlive your financial resources.

Accepted Answer

A) True 
 B)False

Question 13

Traditional defined benefit plans are better suited than cash-balance plans for a mobile workforce.

Accepted Answer

A) True 
 B)False

Question 14

The period during which premiums are paid for the purchase of an annuity is called the:

Accepted Answer

A)  installment period. 
B)  accumulation period. 
C)  survivor period. 
D)  distribution period. 
E)  contract period. 
A)  installment period. 
B)  accumulation period. 
C)  survivor period. 
D)  distribution period. 
E)  contract period.

Question 15

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. 
Social Security alone [ will | will not ] provide a comfortable standard of living at retirement.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 16

A person who is not gainfully employed must start withdrawing funds from his or her Keogh retirement account by age:

Accepted Answer

A)  50. 
B)  59½. 
C)  65. 
D)  70½. 
E)  75. 
A)  50. 
B)  59½. 
C)  65. 
D)  70½. 
E)  75.

Question 17

Which of the following is a requirement for nearly all workers today to qualify for full retirement benefits under the Social Security system?

Accepted Answer

A)  The individual must be employed in a job covered by Social Security for at least 60 quarters, or 15 years, which need not be consecutive. 
B)  The individual must be employed in a job covered by Social Security for at least 50 quarters, or 12.5 years, which need not be consecutive. 
C)  The individual must be employed in a job covered by Social Security for at least 50 consecutive quarters, or 12.5 years. 
D)  The individual must be employed in a job covered by Social Security for at least 40 quarters, or 10 years, which need not be consecutive. 
E)  The individual must be employed in a job covered by Social Security for at least 40 consecutive quarters, or 10 years. 
A)  The individual must be employed in a job covered by Social Security for at least 60 quarters, or 15 years, which need not be consecutive. 
B)  The individual must be employed in a job covered by Social Security for at least 50 quarters, or 12.5 years, which need not be consecutive. 
C)  The individual must be employed in a job covered by Social Security for at least 50 consecutive quarters, or 12.5 years. 
D)  The individual must be employed in a job covered by Social Security for at least 40 quarters, or 10 years, which need not be consecutive. 
E)  The individual must be employed in a job covered by Social Security for at least 40 consecutive quarters, or 10 years.

Question 18

Which of the following statements regarding Social Security benefits is true?

Accepted Answer

A)  Social Security benefits are retirement benefits extended only to self-employed people. 
B)  In two-income families, both husband and wife may be eligible for full benefits. 
C)  Social Security benefits are available to military personnel only. 
D)  Social Security benefits may be reduced if the recipient is under age 55 and still gainfully employed. 
E)  To obtain Social Security benefits, you must participate in enough quarters. 
A)  Social Security benefits are retirement benefits extended only to self-employed people. 
B)  In two-income families, both husband and wife may be eligible for full benefits. 
C)  Social Security benefits are available to military personnel only. 
D)  Social Security benefits may be reduced if the recipient is under age 55 and still gainfully employed. 
E)  To obtain Social Security benefits, you must participate in enough quarters.

Question 19

About 40% of people have not calculated how much they need to retire.

Accepted Answer

A) True 
 B)False

Question 20

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.

In recent years, earned income has accounted for a growing amount of total retirement income.

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 cash-balance plan [ does | does not ] guarantee a benefit payout at retirement.

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

Younger persons are able to make larger contributions to traditional individual retirement accounts (IRAs) than persons 50 and over.

It is possible to convert a traditional individual retirement account (IRA) to a Roth IRA.

A person who is self-employed on a part-time basis can qualify for a Keogh account.

The best way to handle individual retirement account (IRA) rollovers is to arrange for the transfer of funds from one firm to another.

A major advantage of most types of annuities is that you cannot outlive your financial resources.

Traditional defined benefit plans are better suited than cash-balance plans for a mobile workforce.

The period during which premiums are paid for the purchase of an annuity is called the:

A person who is not gainfully employed must start withdrawing funds from his or her Keogh retirement account by age:

Which of the following is a requirement for nearly all workers today to qualify for full retirement benefits under the Social Security system?

Which of the following statements regarding Social Security benefits is true?

About 40% of people have not calculated how much they need to retire.

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

Understanding the Financial Planning Process

Developing Your Financial Statements and Plans

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 and Real Estate

Preserving Your Estate

Filters

Exam 14: Planning for Retirement

In recent years, earned income has accounted for a growing amount of total retirement income.

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 cash-balance plan [ does | does not ] guarantee a benefit payout at retirement.

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

Younger persons are able to make larger contributions to traditional individual retirement accounts (IRAs) than persons 50 and over.

It is possible to convert a traditional individual retirement account (IRA) to a Roth IRA.

A person who is self-employed on a part-time basis can qualify for a Keogh account.

The best way to handle individual retirement account (IRA) rollovers is to arrange for the transfer of funds from one firm to another.

A major advantage of most types of annuities is that you cannot outlive your financial resources.

Traditional defined benefit plans are better suited than cash-balance plans for a mobile workforce.

The period during which premiums are paid for the purchase of an annuity is called the:

A person who is not gainfully employed must start withdrawing funds from his or her Keogh retirement account by age:

Which of the following is a requirement for nearly all workers today to qualify for full retirement benefits under the Social Security system?

Which of the following statements regarding Social Security benefits is true?

About 40% of people have not calculated how much they need to retire.

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

Understanding the Financial Planning Process

Developing Your Financial Statements and Plans

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 and Real Estate

Preserving Your Estate

Filters