Question 1

In the last 10 years,many employers have shifted from

Accepted Answer

A) defined-contribution to defined-benefit plans. 
B) defined-benefit to defined-contribution plans. 
C) 401(k)plans to 403-b plans. 
D) SEP plans to SIMPLE plans. 
A) defined-contribution to defined-benefit plans. 
B) defined-benefit to defined-contribution plans. 
C) 401(k)plans to 403-b plans. 
D) SEP plans to SIMPLE plans. B

Question 2

In retirement planning,which of the following is false?

Accepted Answer

A) Social Security is enough for retirement 
B) IRAs are a good investment 
C) Additional tax deferred investments are needed 
D) You should have several pension investments 
A) Social Security is enough for retirement 
B) IRAs are a good investment 
C) Additional tax deferred investments are needed 
D) You should have several pension investments A

Question 3

In the past 10 years or so,many employers have shifted from defined-benefit to defined-contribution retirement plans.

Accepted Answer

A) True 
 B)False  True

Question 4

The Social Security taxes you and your employer pay are put in your specific account for distribution to you at retirement.

Accepted Answer

A) True 
 B)False

Question 5

The Social Security system allows withdrawal of reduced benefits at an early retirement age.

Accepted Answer

A) True 
 B)False

Question 6

The tax characteristics are quite different between a Roth IRA and a traditional IRA in terms of initial contributions and withdrawals after retirement.

Accepted Answer

A) True 
 B)False

Question 7

In an employer-sponsored retirement plan,you should contribute at least

Accepted Answer

A) the amount the employer will match. 
B) 3 percent of your gross income in middle age. 
C) 1 percent of your net income in your early working years. 
D) 15 percent of your income in the last few working years. 
A) the amount the employer will match. 
B) 3 percent of your gross income in middle age. 
C) 1 percent of your net income in your early working years. 
D) 15 percent of your income in the last few working years.

Question 8

The best way to save for retirement is to

Accepted Answer

A) wait until after the bills are paid. 
B) have it deducted directly from your check. 
C) take a loan so you will pay it back fast. 
D) wait until you have accumulated the amount in your checking account. 
A) wait until after the bills are paid. 
B) have it deducted directly from your check. 
C) take a loan so you will pay it back fast. 
D) wait until you have accumulated the amount in your checking account.

Question 9

Contributions to a Roth IRA are not tax deductible initially and,therefore,very few people are interested in using a Roth IRA.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not a result of the Tax Relief Act of 2001 regarding IRAs?

Accepted Answer

A) Annual contribution limit will increase gradually 
B) The level will be adjusted periodically for inflation 
C) Individuals over age 50 will be able to make larger contributions 
D) Penalties for early withdrawal are being phased out 
A) Annual contribution limit will increase gradually 
B) The level will be adjusted periodically for inflation 
C) Individuals over age 50 will be able to make larger contributions 
D) Penalties for early withdrawal are being phased out

Question 11

Individuals normally incur a tax penalty if funds are drawn from an IRA before the age of 59-1/2.

Accepted Answer

A) True 
 B)False

Question 12

Both the SEP (Simplified Employee Plan)and the SIMPLE (Savings Incentive Match Plan for Employees)retirement plans are intended for use by smaller firms.

Accepted Answer

A) True 
 B)False

Question 13

What three factors do you need to calculate how much money you will accumulate by retirement?

Accepted Answer

Time,inter

Question 14

Which of the following is not a characteristic of a traditional IRA?

Accepted Answer

A) For a married couple,the contribution limit doubles 
B) Individuals over 50 are allowed to make additional catch-up contributions 
C) Everyone is eligible regardless of income. 
D) 10 percent penalty normally applies if funds are withdrawn before age 59-1/2. 
A) For a married couple,the contribution limit doubles 
B) Individuals over 50 are allowed to make additional catch-up contributions 
C) Everyone is eligible regardless of income. 
D) 10 percent penalty normally applies if funds are withdrawn before age 59-1/2.

Question 15

Which of the following employers might offer you a SEP?

Accepted Answer

A) Al's Gas Station 
B) Ford Motor Company 
C) U)S.Army 
D) General Electric 
A) Al's Gas Station 
B) Ford Motor Company 
C) U)S.Army 
D) General Electric

Question 16

Social Security taxes are paid by both employees and employers,but Medicare taxes are paid by employers only.

Accepted Answer

A) True 
 B)False

Question 17

How much could an individual earning $187,000 per year accumulate in a Keogh plan if they invested the maximum allowed for 20 years at a return of 9 percent? Round to the nearest dollar if needed.
(a)$2,148,678
(b)$2,391,683
(c)$840,000
(d)935,000

Accepted Answer

(a)$187,000 × 0.25 = $46,750 S

Question 18

The fees charged by financial institutions for annuities may include all of the following except

Accepted Answer

A) management fees. 
B) surrender charges. 
C) insurance fees or commissions. 
D) no-load annuity fees. 
A) management fees. 
B) surrender charges. 
C) insurance fees or commissions. 
D) no-load annuity fees.

Question 19

Social Security provides sufficient income to support the lifestyles of most individuals.

Accepted Answer

A) True 
 B)False

Question 20

An ESOP (Employee Stock Ownership Plan)is generally more risky than retirement plans invested in diversified mutual funds.

Accepted Answer

A) True 
 B)False

Exam 19: Retirement Planning

In the last 10 years,many employers have shifted from

In retirement planning,which of the following is false?

In the past 10 years or so,many employers have shifted from defined-benefit to defined-contribution retirement plans.

The Social Security taxes you and your employer pay are put in your specific account for distribution to you at retirement.

The Social Security system allows withdrawal of reduced benefits at an early retirement age.

The tax characteristics are quite different between a Roth IRA and a traditional IRA in terms of initial contributions and withdrawals after retirement.

In an employer-sponsored retirement plan,you should contribute at least

The best way to save for retirement is to

Contributions to a Roth IRA are not tax deductible initially and,therefore,very few people are interested in using a Roth IRA.

Which of the following is not a result of the Tax Relief Act of 2001 regarding IRAs?

Individuals normally incur a tax penalty if funds are drawn from an IRA before the age of 59-1/2.

Both the SEP (Simplified Employee Plan)and the SIMPLE (Savings Incentive Match Plan for Employees)retirement plans are intended for use by smaller firms.

What three factors do you need to calculate how much money you will accumulate by retirement?

Which of the following is not a characteristic of a traditional IRA?

Which of the following employers might offer you a SEP?

Social Security taxes are paid by both employees and employers,but Medicare taxes are paid by employers only.

How much could an individual earning $187,000 per year accumulate in a Keogh plan if they invested the maximum allowed for 20 years at a return of 9 percent? Round to the nearest dollar if needed. (a)$2,148,678 (b)$2,391,683 (c)$840,000 (d)935,000

The fees charged by financial institutions for annuities may include all of the following except

Social Security provides sufficient income to support the lifestyles of most individuals.

An ESOP (Employee Stock Ownership Plan)is generally more risky than retirement plans invested in diversified mutual funds.

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Estate Planning

Integrating the Components of a Financial Plan

Filters