Question 1

Medicaid eligibility is based on certain guidelines. In general, which of the following is NOT one of those guidelines?

Accepted Answer

A) Past Medicaid contributions 
B) Household income 
C) Disability status 
D) Family status 
A) Past Medicaid contributions 
B) Household income 
C) Disability status 
D) Family status A

Question 2

Craig contributes to his IRA monthly and when he has an extra lump sum of money he adds it to his account. The maximum contribution amount is $5,000; this year Craig contributed $5,500. What amount will his excess contribution penalty be?

Accepted Answer

A) 10 percent 
B) 13 percent 
C) 6 percent 
D) 3 percent 
A) 10 percent 
B) 13 percent 
C) 6 percent 
D) 3 percent C

Question 3

What is a distinguishing feature of a cash balance plan?

Accepted Answer

A) Low administration costs. 
B) Not covered by Pension Benefit Guaranty Corporation. 
C) Separate accounts are established for each participant. 
D) Investment risk rests on employee. 
A) Low administration costs. 
B) Not covered by Pension Benefit Guaranty Corporation. 
C) Separate accounts are established for each participant. 
D) Investment risk rests on employee. C

Question 4

What are the major types of qualified plan categories?

Accepted Answer

A) Defined Benefit Plans and Defined Contribution Plans 
B) Vesting Plans and Quasi-vesting Plans 
C) Defined Benefit Plans and Vesting Plans 
D) Defined Contribution Plans and Quasi-vesting Plans 
A) Defined Benefit Plans and Defined Contribution Plans 
B) Vesting Plans and Quasi-vesting Plans 
C) Defined Benefit Plans and Vesting Plans 
D) Defined Contribution Plans and Quasi-vesting Plans

Question 5

Marla wants to start a qualified money purchase plan, but she doesn't know much about them beyond what her friend informed her of. What is true about these plans?

Accepted Answer

A) Employers are not required to make contribution based on contribution formulas. 
B) The plan is not subject to minimum funding standards. 
C) The investment risk rests on the employer. 
D) The plan can be integrated with Social Security. 
A) Employers are not required to make contribution based on contribution formulas. 
B) The plan is not subject to minimum funding standards. 
C) The investment risk rests on the employer. 
D) The plan can be integrated with Social Security.

Question 6

Which of the following types of plans allow most individuals to contribute after-tax amounts into government savings bonds and then withdraw those funds without paying tax when they retire?

Accepted Answer

A) Social Security 
B) 401k 
C) Roth IRA 
D) myRA 
A) Social Security 
B) 401k 
C) Roth IRA 
D) myRA

Question 7

Which of the following defines a plan that may provide tax advantages to either the plan sponsor or beneficiary, but not both?

Accepted Answer

A) Defined benefit 
B) Defined contribution 
C) Qualified plan 
D) Non-qualified plan 
A) Defined benefit 
B) Defined contribution 
C) Qualified plan 
D) Non-qualified plan

Question 8

For every year a client waits to claim benefits after reaching full retirement age, by how much do Social Security payments increase?

Accepted Answer

A) 1% 
B) 5% 
C) 8% 
D) 13% 
A) 1% 
B) 5% 
C) 8% 
D) 13%

Question 9

During a divorce, who determines child support?

Accepted Answer

A) Financial Planner 
B) Parents 
C) Courts 
D) Lawyers 
A) Financial Planner 
B) Parents 
C) Courts 
D) Lawyers

Question 10

What percentage of family businesses successfully transition from the first generation of ownership to the second generation?

Accepted Answer

A) 20% 
B) 30% 
C) 50% 
D) 70% 
A) 20% 
B) 30% 
C) 50% 
D) 70%

Question 11

What percentage of all North American business enterprises are estimated to be family-owned?

Accepted Answer

A) 10-20% 
B) 40-50% 
C) 60-70% 
D) 80-90% 
A) 10-20% 
B) 40-50% 
C) 60-70% 
D) 80-90%

Question 12

What is information asymmetry?

Accepted Answer

A) The transfer of knowledge from one party to another 
B) The difference in knowledge of one party and another 
C) The difference in quality assessed by the buyer and quality assessed by the seller 
D) The price of goods and services in a contract 
A) The transfer of knowledge from one party to another 
B) The difference in knowledge of one party and another 
C) The difference in quality assessed by the buyer and quality assessed by the seller 
D) The price of goods and services in a contract

Question 13

The Internal Revenue Code excludes individual from withdrawal penalties. Which item is not excluded?

Accepted Answer

A) On the date or after the participant are 59 ½ years old 
B) A payment to an alternate payee pursuant to a qualified domestic relations order 
C) Corrective distributions 
D) Prevention of eviction or foreclosure 
A) On the date or after the participant are 59 ½ years old 
B) A payment to an alternate payee pursuant to a qualified domestic relations order 
C) Corrective distributions 
D) Prevention of eviction or foreclosure

Question 14

Rick says that his employees are complaining that their benefits plan isn't fair to everyone working in the company. To check if this is true, what should be recommended for Rick to do?

Accepted Answer

A) Provide more benefits. 
B) Create different plans for each employee. 
C) Terminate the plan and offer no benefits. 
D) Complete a cross-testing analysis. 
A) Provide more benefits. 
B) Create different plans for each employee. 
C) Terminate the plan and offer no benefits. 
D) Complete a cross-testing analysis.

Question 15

What type of qualified plan insists employer contributions to be "substantial and recurring", have non-discriminatory allocation of contributions, and is highly recommend for upstart companies?

Accepted Answer

A) Section 402 (k) 
B) Profit Sharing 
C) Money Purchase 
D) SIMPLE 401 (k) 
A) Section 402 (k) 
B) Profit Sharing 
C) Money Purchase 
D) SIMPLE 401 (k)

Question 16

Your 18 year old client says he's not working pass the age of 30. A life of retirement is for him. You inform that the costs of goods and services that retirees use most often increase faster than the general rate of inflation measured by the ______?

Accepted Answer

A) Internal Revenue Service 
B) Standard and Poor 
C) Consumer Price Index 
D) Social Security Agency 
A) Internal Revenue Service 
B) Standard and Poor 
C) Consumer Price Index 
D) Social Security Agency

Question 17

Your new client owns her own company and is 10 years from retiring, what would be the best plan for the client to consider?

Accepted Answer

A) Cash Balance Plan 
B) Money Purchase Plans 
C) 412 (i) plan 
D) Thrift Plan 
A) Cash Balance Plan 
B) Money Purchase Plans 
C) 412 (i) plan 
D) Thrift Plan

Question 18

Tara wants to convert her traditional IRA into a Roth IRA, but she is not sure she can do it. What should you check to confirm that Tara can do the conversion?

Accepted Answer

A) See if she has a modified AGI that exceeds $100,000 
B) Determine if she is married but filing a separate tax return 
C) Nothing, there are no conversion rules 
D) Both A and B 
A) See if she has a modified AGI that exceeds $100,000 
B) Determine if she is married but filing a separate tax return 
C) Nothing, there are no conversion rules 
D) Both A and B

Question 19

A couple is getting a divorce, you are discussing the division of retirement plans, how many methods will the financial planner introduce?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 20

Becky's parents have died in a car crash, she is five. Her grandparents are 59 years old and now care for her. Granddad is considering taking on some work to earn a little extra money. He is wondering how an extra job may affect the benefits they receive for Becky's care, what do you tell him about working?

Accepted Answer

A) Any type of work will stop benefit eligibility. 
B) As long as he earns less than $7,005 per year, he is eligible for benefits. 
C) As long as he earns less than $14,160 per year, he is eligible for benefits. 
D) He is eligible for benefits regardless of the amount of income he earns. 
A) Any type of work will stop benefit eligibility. 
B) As long as he earns less than $7,005 per year, he is eligible for benefits. 
C) As long as he earns less than $14,160 per year, he is eligible for benefits. 
D) He is eligible for benefits regardless of the amount of income he earns.

Medicaid eligibility is based on certain guidelines. In general, which of the following is NOT one of those guidelines?

Craig contributes to his IRA monthly and when he has an extra lump sum of money he adds it to his account. The maximum contribution amount is $5,000; this year Craig contributed $5,500. What amount will his excess contribution penalty be?

What is a distinguishing feature of a cash balance plan?

What are the major types of qualified plan categories?

Marla wants to start a qualified money purchase plan, but she doesn't know much about them beyond what her friend informed her of. What is true about these plans?

Which of the following types of plans allow most individuals to contribute after-tax amounts into government savings bonds and then withdraw those funds without paying tax when they retire?

Which of the following defines a plan that may provide tax advantages to either the plan sponsor or beneficiary, but not both?

For every year a client waits to claim benefits after reaching full retirement age, by how much do Social Security payments increase?

During a divorce, who determines child support?

What percentage of family businesses successfully transition from the first generation of ownership to the second generation?

What percentage of all North American business enterprises are estimated to be family-owned?

What is information asymmetry?

The Internal Revenue Code excludes individual from withdrawal penalties. Which item is not excluded?

Rick says that his employees are complaining that their benefits plan isn't fair to everyone working in the company. To check if this is true, what should be recommended for Rick to do?

What type of qualified plan insists employer contributions to be "substantial and recurring", have non-discriminatory allocation of contributions, and is highly recommend for upstart companies?

Your 18 year old client says he's not working pass the age of 30. A life of retirement is for him. You inform that the costs of goods and services that retirees use most often increase faster than the general rate of inflation measured by the ______?

Your new client owns her own company and is 10 years from retiring, what would be the best plan for the client to consider?

Tara wants to convert her traditional IRA into a Roth IRA, but she is not sure she can do it. What should you check to confirm that Tara can do the conversion?

A couple is getting a divorce, you are discussing the division of retirement plans, how many methods will the financial planner introduce?

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Exam 6: Retirement Savings and Income Planning

Medicaid eligibility is based on certain guidelines. In general, which of the following is NOT one of those guidelines?

Craig contributes to his IRA monthly and when he has an extra lump sum of money he adds it to his account. The maximum contribution amount is $5,000; this year Craig contributed $5,500. What amount will his excess contribution penalty be?

What is a distinguishing feature of a cash balance plan?

What are the major types of qualified plan categories?

Marla wants to start a qualified money purchase plan, but she doesn't know much about them beyond what her friend informed her of. What is true about these plans?

Which of the following types of plans allow most individuals to contribute after-tax amounts into government savings bonds and then withdraw those funds without paying tax when they retire?

Which of the following defines a plan that may provide tax advantages to either the plan sponsor or beneficiary, but not both?

For every year a client waits to claim benefits after reaching full retirement age, by how much do Social Security payments increase?

During a divorce, who determines child support?

What percentage of family businesses successfully transition from the first generation of ownership to the second generation?

What percentage of all North American business enterprises are estimated to be family-owned?

What is information asymmetry?

The Internal Revenue Code excludes individual from withdrawal penalties. Which item is not excluded?

Rick says that his employees are complaining that their benefits plan isn't fair to everyone working in the company. To check if this is true, what should be recommended for Rick to do?

What type of qualified plan insists employer contributions to be "substantial and recurring", have non-discriminatory allocation of contributions, and is highly recommend for upstart companies?

Your 18 year old client says he's not working pass the age of 30. A life of retirement is for him. You inform that the costs of goods and services that retirees use most often increase faster than the general rate of inflation measured by the ______?

Your new client owns her own company and is 10 years from retiring, what would be the best plan for the client to consider?

Tara wants to convert her traditional IRA into a Roth IRA, but she is not sure she can do it. What should you check to confirm that Tara can do the conversion?

A couple is getting a divorce, you are discussing the division of retirement plans, how many methods will the financial planner introduce?

Education Planning

Education Planning

Estate Planning

Estate Planning

General Principles of Financial Planning

General Principles of Financial Planning

Investment Planning

Investment Planning

Professional Conduct and Regulation

Professional Conduct and Regulation

Retirement Savings and Income Planning

Risk Management and Insurance Planning

Risk Management and Insurance Planning

Tax Planning

Tax Planning

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