Question 1

The amount of the minimum required distribution from a 401(k)at age 70½ is based on your life expectancy at the time of the distribution.

Accepted Answer

A) True 
 B)False

Question 2

John Carpenter works as a manager of a retail store.His employer has been setting money aside for him each month in the amount of 7 percent of his monthly earnings.What type of retirement plan does John have?

Accepted Answer

A) money-purchase pension plan 
B) stock bonus plan 
C) profit-sharing plan 
D) 403(b)plan 
E) defined benefit plan 
A) money-purchase pension plan 
B) stock bonus plan 
C) profit-sharing plan 
D) 403(b)plan 
E) defined benefit plan

Question 3

Karen Endicott is planning for her retirement.She knows that after she retires she will no longer need her own single family dwelling.She plans on buying a condominium in Chicago,close to the bus and train line and close to a grocery store.What step in the retirement planning process is Karen completing?

Accepted Answer

A) analyzing her current assets and liabilities 
B) estimating her spending needs 
C) evaluating her planned retirement income 
D) evaluating her retirement housing 
E) developing a balanced budget based on her retirement income 
A) analyzing her current assets and liabilities 
B) estimating her spending needs 
C) evaluating her planned retirement income 
D) evaluating her retirement housing 
E) developing a balanced budget based on her retirement income

Question 4

Nancy Moore is planning for her retirement.She guesses that by the time she retires her mortgage will be paid off on her home.She expects she will pay $600 a month on food and that her medical expenses will be $400 a month.She also estimates that she will spend $400 a month on things that she enjoys like traveling,going to concerts,reading and other similar activities.What step in the retirement planning process is Nancy completing?

Accepted Answer

A) analyzing her current assets and liabilities 
B) estimating her spending needs 
C) evaluating her planned retirement income 
D) evaluating her retirement housing 
E) developing a balanced budget based on her retirement income 
A) analyzing her current assets and liabilities 
B) estimating her spending needs 
C) evaluating her planned retirement income 
D) evaluating her retirement housing 
E) developing a balanced budget based on her retirement income

Question 5

Explain the difference between a defined-contribution and defined benefit plan.

Accepted Answer

A defined-contribution plan has an indiv

Question 6

With a defined-contribution plan,the plan document specifies the benefits promised to the employee at the normal retirement age.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is(are)a feature of an Education IRA?

Accepted Answer

A) tax-deferred interest and earnings 
B) 10% early withdrawal penalty waiver when money is used for higher-education 
C) annual limit on individual contributions 
D) non-deductible contributions 
E) all of the features listed in the other answers 
A) tax-deferred interest and earnings 
B) 10% early withdrawal penalty waiver when money is used for higher-education 
C) annual limit on individual contributions 
D) non-deductible contributions 
E) all of the features listed in the other answers

Question 8

Pension plan portability enables you to carry earned benefits from one employer's pension plan to another's when you change jobs.

Accepted Answer

A) True 
 B)False

Question 9

The people who are in the best position to save are:

Accepted Answer

A) teenagers. 
B) young adults in their 20s. 
C) people in their 30s. 
D) middle-ageD. 
E) elderly. 
A) teenagers. 
B) young adults in their 20s. 
C) people in their 30s. 
D) middle-ageD. 
E) elderly.

Question 10

The potential loss of buying power during inflation is what makes it so important to plan ahead for your retirement.

Accepted Answer

A) True 
 B)False

Question 11

Sarah Logan is a professor at a public university.Her employer makes nontaxable contributions to a plan in her name and reduces her salary by the same amount.What type of retirement plan does Sarah have?

Accepted Answer

A) money-purchase pension plan 
B) stock bonus plan 
C) profit-sharing plan 
D) defined benefit plan 
E) 403(b)plan 
A) money-purchase pension plan 
B) stock bonus plan 
C) profit-sharing plan 
D) defined benefit plan 
E) 403(b)plan

Question 12

Why is it important to review your assets and liabilities before your retirement?

Accepted Answer

Reviewing your assets and liab

Question 13

Keogh plans can be both defined-contribution and defined-benefit plans.

Accepted Answer

A) True 
 B)False

Question 14

Some retirement planning experts suggest that you start retirement planning while you are:

Accepted Answer

A) in school. 
B) married. 
C) divorced. 
D) middle-ageD. 
E) still employed. 
A) in school. 
B) married. 
C) divorced. 
D) middle-ageD. 
E) still employed.

Question 15

Social Security should be the only source of your retirement income.

Accepted Answer

A) True 
 B)False

Question 16

Your expenses for leisure activities will probably decrease during retirement.

Accepted Answer

A) True 
 B)False

Question 17

If a marriage lasted more than 15 years,the marital assets are generally split 50-50 if the couple divorces.

Accepted Answer

A) True 
 B)False

Question 18

You can keep money in most retirement plans indefinitely.

Accepted Answer

A) True 
 B)False

Question 19

Saving money doesn't come naturally to many young people.

Accepted Answer

A) True 
 B)False

Question 20

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

The amount of the minimum required distribution from a 401(k)at age 70½ is based on your life expectancy at the time of the distribution.

John Carpenter works as a manager of a retail store.His employer has been setting money aside for him each month in the amount of 7 percent of his monthly earnings.What type of retirement plan does John have?

Explain the difference between a defined-contribution and defined benefit plan.

With a defined-contribution plan,the plan document specifies the benefits promised to the employee at the normal retirement age.

Which of the following is(are)a feature of an Education IRA?

Pension plan portability enables you to carry earned benefits from one employer's pension plan to another's when you change jobs.

The people who are in the best position to save are:

The potential loss of buying power during inflation is what makes it so important to plan ahead for your retirement.

Sarah Logan is a professor at a public university.Her employer makes nontaxable contributions to a plan in her name and reduces her salary by the same amount.What type of retirement plan does Sarah have?

Why is it important to review your assets and liabilities before your retirement?

Keogh plans can be both defined-contribution and defined-benefit plans.

Some retirement planning experts suggest that you start retirement planning while you are:

Social Security should be the only source of your retirement income.

Your expenses for leisure activities will probably decrease during retirement.

If a marriage lasted more than 15 years,the marital assets are generally split 50-50 if the couple divorces.

You can keep money in most retirement plans indefinitely.

Saving money doesn't come naturally to many young people.

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

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 Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Estate Planning

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Exam 18: Starting Early: Retirement Planning

The amount of the minimum required distribution from a 401(k)at age 70½ is based on your life expectancy at the time of the distribution.

John Carpenter works as a manager of a retail store.His employer has been setting money aside for him each month in the amount of 7 percent of his monthly earnings.What type of retirement plan does John have?

Explain the difference between a defined-contribution and defined benefit plan.

With a defined-contribution plan,the plan document specifies the benefits promised to the employee at the normal retirement age.

Which of the following is(are)a feature of an Education IRA?

Pension plan portability enables you to carry earned benefits from one employer's pension plan to another's when you change jobs.

The people who are in the best position to save are:

The potential loss of buying power during inflation is what makes it so important to plan ahead for your retirement.

Sarah Logan is a professor at a public university.Her employer makes nontaxable contributions to a plan in her name and reduces her salary by the same amount.What type of retirement plan does Sarah have?

Why is it important to review your assets and liabilities before your retirement?

Keogh plans can be both defined-contribution and defined-benefit plans.

Some retirement planning experts suggest that you start retirement planning while you are:

Social Security should be the only source of your retirement income.

Your expenses for leisure activities will probably decrease during retirement.

If a marriage lasted more than 15 years,the marital assets are generally split 50-50 if the couple divorces.

You can keep money in most retirement plans indefinitely.

Saving money doesn't come naturally to many young people.

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

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 Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Estate Planning

Filters