Question 1

Which of the following is an important factor to consider in deciding between saving in a TFSA account or an RRSP account?

Accepted Answer

A) Your tax bracket 
B) The appropriate risk level 
C) Tax sheltering of investment income 
D) The types of investment vehicles 
A) Your tax bracket 
B) The appropriate risk level 
C) Tax sheltering of investment income 
D) The types of investment vehicles A

Question 2

Old Age Security can be deferred for five years,which would increase ones benefit by an additional 36 percent.

Accepted Answer

A) True 
 B)False  True

Question 3

Identify the similarities and differences between RRSP and TFSA accounts and indicate implications.

Accepted Answer

There are many possibilities:
Contribution room:Both accumulate year after year,however,the RRSP room is based on previous year's earned income (minus pension contributions)to a maximum of around $24 000,so a lot more room for high income individuals.The TFSA is $5500 per year for everyone and will increase in steps along with inflation.
Withdrawals:Taxed for RRSPS as income,not for TFSAs.
With the RRSP you lose the room for ever unless using the HBP or LLP,but for TFSAs you can replace funds the next year.This makes the TFSA much more flexible for various financial planning goals and shorter term goals than retiring.It also makes the TFSA important in retirement as income from it will not be included in taxable income and limit OAS etc.
Tax deduction for contributions:Yes for RRSPs so attractive to those in higher tax bracket.No deduction for TFSAs.
Tax sheltering:investment growth is tax sheltered in both accounts,but for RRSPs all funds withdrawn as fully taxed as income,but not for TFSAs
Investment options:Similar variety available for both.

Question 4

Once you leave a job with an employer,you will probably have to forfeit your pension plan unless you have been with the company for five or more years.

Accepted Answer

A) True 
 B)False

Question 5

In Canada,employees who are members of defined-benefit programs cannot contribute more than 50 percent toward their pensions.

Accepted Answer

A) True 
 B)False

Question 6

You want to save $400 000 to supplement your pension income to retire early at age 60.You have 26 years to accomplish this and already have $90 000 saved.Assuming an eight percent annual return,how much should you set aside each month to reach this goal?

Accepted Answer

A) $311 
B) $267 
C) $1072 
D) $994 
A) $311 
B) $267 
C) $1072 
D) $994

Question 7

If you qualify,the maximum withdrawal allowed under the Home Buyers' Plan (HBP)is

Accepted Answer

A) $20 000 per person. 
B) $25 000 per person. 
C) $25 000 per couple. 
D) $40 000 per couple. 
A) $20 000 per person. 
B) $25 000 per person. 
C) $25 000 per couple. 
D) $40 000 per couple.

Question 8

If you earned $66 000 in the previous year and received a pension adjustment of $8200,then you would have $3680 RRSP room left for that year.

Accepted Answer

A) True 
 B)False

Question 9

You are retiring and the balance of your RRSP is $203 126.What amount of monthly income could this provide you for 20 years if you can get a four percent annual return?

Accepted Answer

A) $1223 
B) $846 
C) $880 
D) $1782 
A) $1223 
B) $846 
C) $880 
D) $1782

Question 10

If Ramzi earned $46 000 from employment,what will his employer deduct for his CPP contribution? (YMPE $52 500;YBE $3500)

Accepted Answer

A) $2277.00 
B) $2082.50 
C) $4207.50 
D) $1955.00 
A) $2277.00 
B) $2082.50 
C) $4207.50 
D) $1955.00

Question 11

If you were 28 years old when you moved to Canada and became a resident,at age 65 you would be entitled to

Accepted Answer

A) a full OAS pension if your income is below $70 000. 
B) an OAS pension of 27/30 if your income is below approximately $115 000. 
C) an OAS pension depending on your life time YMPE earnings. 
D) an OAS pension of 37/40 if your income is below approximately $70 000. 
A) a full OAS pension if your income is below $70 000. 
B) an OAS pension of 27/30 if your income is below approximately $115 000. 
C) an OAS pension depending on your life time YMPE earnings. 
D) an OAS pension of 37/40 if your income is below approximately $70 000.

Question 12

Which of the following applies to the CPP?

Accepted Answer

A) You will collect more total CPP if you claim it at age 60. 
B) The amount you qualify for can be increased by up to 42% if you defer claiming it. 
C) Most Canadians qualify for the maximum CPP retirement income. 
D) It is a tax-free benefit that provides an income of roughly $16 000 per year. 
A) You will collect more total CPP if you claim it at age 60. 
B) The amount you qualify for can be increased by up to 42% if you defer claiming it. 
C) Most Canadians qualify for the maximum CPP retirement income. 
D) It is a tax-free benefit that provides an income of roughly $16 000 per year.

Question 13

Once you are 'vested' in your company's pension plan,you can cash the funds in if you decide to leave the company.

Accepted Answer

A) True 
 B)False

Question 14

If you are far from retirement age and wish to maximize your income in retirement,you should consider investing in

Accepted Answer

A) government bonds or bond funds. 
B) guaranteed investment certificates. 
C) mutual funds with high-growth stocks. 
D) corporate bonds. 
A) government bonds or bond funds. 
B) guaranteed investment certificates. 
C) mutual funds with high-growth stocks. 
D) corporate bonds.

Question 15

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

Accepted Answer

A) Defined-contribution plan 
B) RRSP 
C) Traditional LIRA 
D) Defined-benefit plan 
A) Defined-contribution plan 
B) RRSP 
C) Traditional LIRA 
D) Defined-benefit plan

Question 16

You have earned income of $56 000 for last year.You have a defined-contribution plan to which your employer contributes 50 percent.The employer contributed $3500.How much of an RRSP contribution can you make this year,assuming you have no accumulated RRSP room?

Accepted Answer

A) $3500 
B) $10 080 
C) $3080 
D) $6580 
A) $3500 
B) $10 080 
C) $3080 
D) $6580

Question 17

Which is a key difference between RRSPs and TFSAs?

Accepted Answer

A) TFSA withdrawals are taxed. 
B) RRSPs' contribution limit accumulates. 
C) TFSAs give tax deductions on contributions. 
D) RRSP withdrawals are taxed. 
A) TFSA withdrawals are taxed. 
B) RRSPs' contribution limit accumulates. 
C) TFSAs give tax deductions on contributions. 
D) RRSP withdrawals are taxed.

Question 18

Which of the following is True regarding pension plans?

Accepted Answer

A) A defined contribution pension plan is the same as an RRSP. 
B) Once you are vested in a pension plan,you can transfer the assets to your RRSP if you leave. 
C) Defined-benefit pension plans are always advantageous,but not defined-contribution plans. 
D) You should take advantage of them because the employer must contribute at least half the funding. 
A) A defined contribution pension plan is the same as an RRSP. 
B) Once you are vested in a pension plan,you can transfer the assets to your RRSP if you leave. 
C) Defined-benefit pension plans are always advantageous,but not defined-contribution plans. 
D) You should take advantage of them because the employer must contribute at least half the funding.

Question 19

In the past 10 years or so,many employers have shifted from defined-benefit to defined-contribution retirement plans to reduce their financial risk in funding employees' retirements.

Accepted Answer

A) True 
 B)False

Question 20

What rate of return (compounded monthly)will you need,to reach a lump-sum total of ?$500 000 in 20 years if you contribute $500 per month?

Accepted Answer

A) 12.1 percent 
B) 8)9 percent 
C) 13.2 percent 
D) 7)31 percent 
A) 12.1 percent 
B) 8)9 percent 
C) 13.2 percent 
D) 7)31 percent

Which of the following is an important factor to consider in deciding between saving in a TFSA account or an RRSP account?

Old Age Security can be deferred for five years,which would increase ones benefit by an additional 36 percent.

Identify the similarities and differences between RRSP and TFSA accounts and indicate implications.

Once you leave a job with an employer,you will probably have to forfeit your pension plan unless you have been with the company for five or more years.

In Canada,employees who are members of defined-benefit programs cannot contribute more than 50 percent toward their pensions.

You want to save $400 000 to supplement your pension income to retire early at age 60.You have 26 years to accomplish this and already have $90 000 saved.Assuming an eight percent annual return,how much should you set aside each month to reach this goal?

If you qualify,the maximum withdrawal allowed under the Home Buyers' Plan (HBP)is

If you earned $66 000 in the previous year and received a pension adjustment of $8200,then you would have $3680 RRSP room left for that year.

You are retiring and the balance of your RRSP is $203 126.What amount of monthly income could this provide you for 20 years if you can get a four percent annual return?

If Ramzi earned $46 000 from employment,what will his employer deduct for his CPP contribution? (YMPE $52 500;YBE $3500)

If you were 28 years old when you moved to Canada and became a resident,at age 65 you would be entitled to

Which of the following applies to the CPP?

Once you are 'vested' in your company's pension plan,you can cash the funds in if you decide to leave the company.

If you are far from retirement age and wish to maximize your income in retirement,you should consider investing in

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

You have earned income of $56 000 for last year.You have a defined-contribution plan to which your employer contributes 50 percent.The employer contributed $3500.How much of an RRSP contribution can you make this year,assuming you have no accumulated RRSP room?

Which is a key difference between RRSPs and TFSAs?

Which of the following is True regarding pension plans?

In the past 10 years or so,many employers have shifted from defined-benefit to defined-contribution retirement plans to reduce their financial risk in funding employees' retirements.

What rate of return (compounded monthly)will you need,to reach a lump-sum total of ?$500 000 in 20 years if you contribute $500 per month?

Overview of a Financial Plan

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Planning with Personal Financial Statements

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing, Managing, and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

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Exam 14: Retirement and Estate Planning - Retirement Planning

Which of the following is an important factor to consider in deciding between saving in a TFSA account or an RRSP account?

Old Age Security can be deferred for five years,which would increase ones benefit by an additional 36 percent.

Identify the similarities and differences between RRSP and TFSA accounts and indicate implications.

Once you leave a job with an employer,you will probably have to forfeit your pension plan unless you have been with the company for five or more years.

In Canada,employees who are members of defined-benefit programs cannot contribute more than 50 percent toward their pensions.

You want to save $400 000 to supplement your pension income to retire early at age 60.You have 26 years to accomplish this and already have $90 000 saved.Assuming an eight percent annual return,how much should you set aside each month to reach this goal?

If you qualify,the maximum withdrawal allowed under the Home Buyers' Plan (HBP)is

If you earned $66 000 in the previous year and received a pension adjustment of $8200,then you would have $3680 RRSP room left for that year.

You are retiring and the balance of your RRSP is $203 126.What amount of monthly income could this provide you for 20 years if you can get a four percent annual return?

If Ramzi earned $46 000 from employment,what will his employer deduct for his CPP contribution? (YMPE $52 500;YBE $3500)

If you were 28 years old when you moved to Canada and became a resident,at age 65 you would be entitled to

Which of the following applies to the CPP?

Once you are 'vested' in your company's pension plan,you can cash the funds in if you decide to leave the company.

If you are far from retirement age and wish to maximize your income in retirement,you should consider investing in

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

You have earned income of $56 000 for last year.You have a defined-contribution plan to which your employer contributes 50 percent.The employer contributed $3500.How much of an RRSP contribution can you make this year,assuming you have no accumulated RRSP room?

Which is a key difference between RRSPs and TFSAs?

Which of the following is True regarding pension plans?

In the past 10 years or so,many employers have shifted from defined-benefit to defined-contribution retirement plans to reduce their financial risk in funding employees' retirements.

What rate of return (compounded monthly)will you need,to reach a lump-sum total of ?$500 000 in 20 years if you contribute $500 per month?

Overview of a Financial Plan

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Planning with Personal Financial Statements

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing, Managing, and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

Filters