Exam 16: Retirement Planning

A person may have more than one qualified retirement plan open at the same time.

With a Roth IRA, after five years you can make withdrawals before age 59 1/2 without a penalty but you must pay taxes on the withdrawals.

Your decision on what type of annuity to purchase will have a dramatic impact on the monthly payments you will receive upon retirement.

Richard Harris wants to elect the single life annuity option for retirement. His mother lived to age 92 and his dad lived to be 89. This annuity will pay Richard a set monthly payment for as long as he lives. What possible disadvantage might he face?

One of the first steps in planning for your retirement is figuring out just what you want to do when you retire.

What are the major differences between the new IRAs and the traditional IRA?

How does Uncle Sam determine our Social Security monthly retirement check for all practical purposes?

Most employees in the United States today are covered by an employer funded defined-benefit plan.

Suppose that you have estimated that, to provide for your retirement income, you will need $2,250,000 on deposit in your retirement account when you retire. You believe that you will earn an average of 11% on your retirement investments until you retire in 35 years. What must your annual deposits be to accumulate this total?

Because inflation makes goods and services cost more over time, one would be wise to always control for inflation when planning one's retirement.

The main advantage of the Roth IRA over the traditional IRA is the employer matching funds.

The big disadvantage with a defined-contribution plan is that you don't know in advance exactly how much money you can plan on for retirement income.

The Roth IRA does not require that distributions begin by age 70 1/2.

The size of your Social Security benefits are determined by your number of years of earnings, your average level of earnings, and an adjustment for inflation.

A 401(k) plan is a tax-deferred retirement plan in which both the employee's contributions to the plan and the earnings on those contributions are tax deductible, with all the taxes being deferred until retirement withdrawals are made.

Which of the following is a problem associated with many defined-benefits programs?

A ________ option provides payments over the life of both you and your spouse no matter how long you live.

Of the tax-favored retirement plans for the self-employed and small business employee, one is limited to $49,000 of annual contributions per person. It is the ________ plan.

If your pension fund contained a provision that allowed employees who were leaving the company to retain and transfer any pension benefits earned to another pension plan, it would be said to have ________.

Rihab just got a new job and wants to roll over her retirement account from her previous job at a large corporation into an IRA. Which of the following is true?