Question 1

It really makes little difference whether you start retirement savings at age 25 or at age 45.

Accepted Answer

A) True 
 B)False  False

Question 2

Your Social Security contribution depends on your current income and retirement income goal.

Accepted Answer

A) True 
 B)False  False

Question 3

Contributions are made in after-tax dollars to __________. ​

Accepted Answer

A) traditional 401(k)plans 
B) traditional IRAs plans 
C) SEP plans 
D) Roth 401(k)plans 
A) traditional 401(k)plans 
B) traditional IRAs plans 
C) SEP plans 
D) Roth 401(k)plans D

Question 4

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 5

Marcia works for Telephonic Industries and participates in its supplemental retirement plan.In years when the firm has no profit,the firm is not required to contribute to the supplemental retirement plan.This plan is a __________. ​

Accepted Answer

A) defined benefit plan 
B) non-contributory plan 
C) cash balance plan 
D) profit-sharing plan 
A) defined benefit plan 
B) non-contributory plan 
C) cash balance plan 
D) profit-sharing plan

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

The two ways to pay the premiums for annuities are single premium and:

Accepted Answer

A) refundable premium. 
B) premium in future. 
C) premium in installments. 
D) guaranteed premium. 
E) lateral premium. 
A) refundable premium. 
B) premium in future. 
C) premium in installments. 
D) guaranteed premium. 
E) lateral premium.

Question 8

The purpose of the Social Security retirement program is to:

Accepted Answer

A) ensure retirement income equal to 75 percent of preretirement income. 
B) pay for health care costs. 
C) replace defunct pension fund plans. 
D) provide a basic and adequate income to eligible retirees. 
E) levy tax on the retirement funds of federal civilian employees. 
A) ensure retirement income equal to 75 percent of preretirement income. 
B) pay for health care costs. 
C) replace defunct pension fund plans. 
D) provide a basic and adequate income to eligible retirees. 
E) levy tax on the retirement funds of federal civilian employees.

Question 9

Melissa's retirement plan is described in her employee handbook as follows: Noncontributory
Cliff vesting (100 percent)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 contribute to the plan. 
B) If Melissa leaves this company before working full-time for three 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 six years of employment. 
A) Melissa will have to contribute to the plan. 
B) If Melissa leaves this company before working full-time for three 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 six years of employment.

Question 10

Which of the following pension plans enables an employee to estimate what his or her pension payment would be upon retirement?

Accepted Answer

A) A Keogh plan 
B) A profit-sharing plan 
C) A defined benefit plan 
D) A defined contribution plan 
E) A 401(k)plan 
A) A Keogh plan 
B) A profit-sharing plan 
C) A defined benefit plan 
D) A defined contribution plan 
E) A 401(k)plan

Question 11

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 12

In order to avoid penalties,a person who is not gainfully employed must typically start taking minimum distributions from Keogh retirement accounts 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 13

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 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)provides:

Accepted Answer

A) funding for retirement plans. 
B) same retirement insurance when employees change employers. 
C) self-employed people with mandatory retirement plans. 
D) protection to employees participating in private employer retirement plans. 
E) trust funds for retirement. 
A) funding for retirement plans. 
B) same retirement insurance when employees change employers. 
C) self-employed people with mandatory retirement plans. 
D) protection to employees participating in private employer retirement plans. 
E) trust funds for retirement.

Question 16

Marshall will need $1,250,000 in his retirement fund in 40 years at the time of his retirement.If Marshall can earn 8 percent 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 17

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

Accepted Answer

A) True 
 B)False

Question 18

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 19

Workers who elect to retire early-at age 62-will receive reduced Social Security retirement benefits.

Accepted Answer

A) True 
 B)False

Question 20

Contributions to profit-sharing retirement plans are invested only in securities issued by the employing firm itself.

Accepted Answer

A) True 
 B)False

It really makes little difference whether you start retirement savings at age 25 or at age 45.

Your Social Security contribution depends on your current income and retirement income goal.

Contributions are made in after-tax dollars to __________.

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

Marcia works for Telephonic Industries and participates in its supplemental retirement plan.In years when the firm has no profit,the firm is not required to contribute to the supplemental retirement plan.This plan is a __________.

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

The two ways to pay the premiums for annuities are single premium and:

The purpose of the Social Security retirement program is to:

Which of the following pension plans enables an employee to estimate what his or her pension payment would be upon retirement?

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

In order to avoid penalties,a person who is not gainfully employed must typically start taking minimum distributions from Keogh retirement accounts by age _____.

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

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?

The Employee Retirement Income Security Act (ERISA)provides:

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

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

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

Workers who elect to retire early-at age 62-will receive reduced Social Security retirement benefits.

Contributions to profit-sharing retirement plans are invested only in securities issued by the employing firm itself.

Understanding the Financial Planning 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

It really makes little difference whether you start retirement savings at age 25 or at age 45.

Your Social Security contribution depends on your current income and retirement income goal.

Contributions are made in after-tax dollars to __________. ​

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

Marcia works for Telephonic Industries and participates in its supplemental retirement plan.In years when the firm has no profit,the firm is not required to contribute to the supplemental retirement plan.This plan is a __________. ​

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

The two ways to pay the premiums for annuities are single premium and:

The purpose of the Social Security retirement program is to:

Which of the following pension plans enables an employee to estimate what his or her pension payment would be upon retirement?

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

In order to avoid penalties,a person who is not gainfully employed must typically start taking minimum distributions from Keogh retirement accounts by age _____.

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

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?

The Employee Retirement Income Security Act (ERISA)provides:

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

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

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

Workers who elect to retire early-at age 62-will receive reduced Social Security retirement benefits.

Contributions to profit-sharing retirement plans are invested only in securities issued by the employing firm itself.

Understanding the Financial Planning 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

Contributions are made in after-tax dollars to __________.

Marcia works for Telephonic Industries and participates in its supplemental retirement plan.In years when the firm has no profit,the firm is not required to contribute to the supplemental retirement plan.This plan is a __________.