Question 1

Which employer retirement plan specifies the benefits promised to the employee at the normal retirement age?

Accepted Answer

A) Defined-contribution plan 
B) SEP IRA 
C) 401(k) 
D) Roth IRA 
E) Defined-benefit plan 
A) Defined-contribution plan 
B) SEP IRA 
C) 401(k) 
D) Roth IRA 
E) Defined-benefit plan

Question 2

You can determine your net worth by:

Accepted Answer

A) subtracting your assets from your liabilities. 
B) subtracting the value of your home from the mortgage balance. 
C) adding your liabilities and assets. 
D) subtracting your liabilities from your assets. 
E) adding the value of your home to that of your other assets. 
A) subtracting your assets from your liabilities. 
B) subtracting the value of your home from the mortgage balance. 
C) adding your liabilities and assets. 
D) subtracting your liabilities from your assets. 
E) adding the value of your home to that of your other assets.

Question 3

Whether or not you are covered by a pension plan,you can still make nondeductible IRA contributions.

Accepted Answer

A) True 
 B)False

Question 4

Which one of the following is not a private source of retirement income?

Accepted Answer

A) Traditional IRAs 
B) Social Security 
C) Defined contribution plans 
D) Defined benefit plans 
E) Spousal IRAs 
A) Traditional IRAs 
B) Social Security 
C) Defined contribution plans 
D) Defined benefit plans 
E) Spousal IRAs

Question 5

At a 3 percent rate of inflation,approximately how many years will it take for prices to double?

Accepted Answer

A) 9 years 
B) 15 years 
C) 21 years 
D) 24 years 
E) 30 years 
A) 9 years 
B) 15 years 
C) 21 years 
D) 24 years 
E) 30 years

Question 6

Why is financial planning for retirement vitally important?

Accepted Answer

A) You can expect to live in retirement up to 30 years. 
B) Social Security and your private pension may be insufficient to cover the cost of living. 
C) Inflation may diminish the purchasing power of your retirement savings. 
D) You can expect to live in retirement for a minimum of 16 years. 
E) All of the listed factors are critically important. 
A) You can expect to live in retirement up to 30 years. 
B) Social Security and your private pension may be insufficient to cover the cost of living. 
C) Inflation may diminish the purchasing power of your retirement savings. 
D) You can expect to live in retirement for a minimum of 16 years. 
E) All of the listed factors are critically important.

Question 7

Your right to at least a portion of the benefits you have accrued under an employer pension plan is called:

Accepted Answer

A) vesting. 
B) inflation-adjusted survivorship. 
C) lump-sum withdrawal option. 
D) guaranteed formula-based benefit. 
E) none of these. 
A) vesting. 
B) inflation-adjusted survivorship. 
C) lump-sum withdrawal option. 
D) guaranteed formula-based benefit. 
E) none of these.

Question 8

Which of the following is typically a characteristic of a defined benefit plan?

Accepted Answer

A) Employer funded with federal rules setting the amounts that employers must contribute 
B) Employee contributions generally required 
C) No federal guarantee of benefits 
D) Employee-managed investments 
E) Account balances transferable to IRAs 
A) Employer funded with federal rules setting the amounts that employers must contribute 
B) Employee contributions generally required 
C) No federal guarantee of benefits 
D) Employee-managed investments 
E) Account balances transferable to IRAs

Question 9

Because of their actuarial aspects,defined-benefit plans tend to be more-complicated and more expensive to administer than defined-contribution plans.

Accepted Answer

A) True 
 B)False

Question 10

Earned interest on annuities accumulates tax free until the annuity payments begin.

Accepted Answer

A) True 
 B)False

Question 11

Which type of housing is preferred by most people who are approaching retirement?

Accepted Answer

A) House-sharing 
B) Present home 
C) A smaller apartment 
D) Nursing home 
E) Boarding-house/rooming house 
A) House-sharing 
B) Present home 
C) A smaller apartment 
D) Nursing home 
E) Boarding-house/rooming house

Question 12

Developing the habit of saving for retirement is easier when you are:

Accepted Answer

A) young. 
B) married. 
C) divorced. 
D) middle-aged. 
E) still employed. 
A) young. 
B) married. 
C) divorced. 
D) middle-aged. 
E) still employed.

Question 13

Over the last two decades,the defined-benefit plan has continued to grow rapidly while the number of defined-contribution plans has generally dropped.

Accepted Answer

A) True 
 B)False

Question 14

If you leave the company before you retire,then you have a right to a portion of the benefits under an employer pension plan only if you are vested.

Accepted Answer

A) True 
 B)False

Question 15

Possible sources of income for many retirees include:

Accepted Answer

A) Social Security. 
B) Other public pension plans. 
C) Employer pension plans. 
D) Personal retirement plans and annuities. 
E) All of these are possible sources of income for retirees. 
A) Social Security. 
B) Other public pension plans. 
C) Employer pension plans. 
D) Personal retirement plans and annuities. 
E) All of these are possible sources of income for retirees.

Question 16

Divorcing couples should pay attention to the tax implications of retirement benefits.

Accepted Answer

A) True 
 B)False

Question 17

Jasmine Smith owns a condo worth $240,000,a car valued at $25,000,and miscellaneous assets worth $7,500.She owes $185,000 on the condo and $15,000 on the car and has no other debts.Her retirement account,in which she is fully vested,contains $27,500 in mutual funds.She was just insured with a $500,000 term life insurance policy.What are her total assets?

Accepted Answer

A) $200,000 
B) $300,000 
C) $100,000 
D) $592,500 
E) $600,000 
A) $200,000 
B) $300,000 
C) $100,000 
D) $592,500 
E) $600,000

Question 18

The first step in stretching your retirement income is to make sure you are receiving all the income to which you are entitled.

Accepted Answer

A) True 
 B)False

Question 19

According to the 2012 Trustees Report,in what year is it projected that the funds available for paying Social Security benefits will be exhausted at current benefit and tax rates?

Accepted Answer

A) 2021 
B) 2035 
C) 2047 
D) 2056 
E) 2062 
A) 2021 
B) 2035 
C) 2047 
D) 2056 
E) 2062

Question 20

Too many people make the move to change housing during retirement without doing enough research.

Accepted Answer

A) True 
 B)False

Which employer retirement plan specifies the benefits promised to the employee at the normal retirement age?

You can determine your net worth by:

Whether or not you are covered by a pension plan,you can still make nondeductible IRA contributions.

Which one of the following is not a private source of retirement income?

At a 3 percent rate of inflation,approximately how many years will it take for prices to double?

Why is financial planning for retirement vitally important?

Your right to at least a portion of the benefits you have accrued under an employer pension plan is called:

Which of the following is typically a characteristic of a defined benefit plan?

Because of their actuarial aspects,defined-benefit plans tend to be more-complicated and more expensive to administer than defined-contribution plans.

Earned interest on annuities accumulates tax free until the annuity payments begin.

Which type of housing is preferred by most people who are approaching retirement?

Developing the habit of saving for retirement is easier when you are:

Over the last two decades,the defined-benefit plan has continued to grow rapidly while the number of defined-contribution plans has generally dropped.

If you leave the company before you retire,then you have a right to a portion of the benefits under an employer pension plan only if you are vested.

Possible sources of income for many retirees include:

Divorcing couples should pay attention to the tax implications of retirement benefits.

The first step in stretching your retirement income is to make sure you are receiving all the income to which you are entitled.

According to the 2012 Trustees Report,in what year is it projected that the funds available for paying Social Security benefits will be exhausted at current benefit and tax rates?

Too many people make the move to change housing during retirement without doing enough research.

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stock

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Estate Planning

Filters

Exam 18: Starting Early: Retirement Planning

Which employer retirement plan specifies the benefits promised to the employee at the normal retirement age?

You can determine your net worth by:

Whether or not you are covered by a pension plan,you can still make nondeductible IRA contributions.

Which one of the following is not a private source of retirement income?

At a 3 percent rate of inflation,approximately how many years will it take for prices to double?

Why is financial planning for retirement vitally important?

Your right to at least a portion of the benefits you have accrued under an employer pension plan is called:

Which of the following is typically a characteristic of a defined benefit plan?

Because of their actuarial aspects,defined-benefit plans tend to be more-complicated and more expensive to administer than defined-contribution plans.

Earned interest on annuities accumulates tax free until the annuity payments begin.

Which type of housing is preferred by most people who are approaching retirement?

Developing the habit of saving for retirement is easier when you are:

Over the last two decades,the defined-benefit plan has continued to grow rapidly while the number of defined-contribution plans has generally dropped.

If you leave the company before you retire,then you have a right to a portion of the benefits under an employer pension plan only if you are vested.

Possible sources of income for many retirees include:

Divorcing couples should pay attention to the tax implications of retirement benefits.

The first step in stretching your retirement income is to make sure you are receiving all the income to which you are entitled.

According to the 2012 Trustees Report,in what year is it projected that the funds available for paying Social Security benefits will be exhausted at current benefit and tax rates?

Too many people make the move to change housing during retirement without doing enough research.

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stock

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Estate Planning

Filters