Question 1

Key retirement planning decisions are all of the following except

Accepted Answer

A) how much to contribute. 
B) whether or not you should contribute. 
C) when to contribute. 
D) how to invest your contributions. 
A) how much to contribute. 
B) whether or not you should contribute. 
C) when to contribute. 
D) how to invest your contributions.

Question 2

Which of the following is not a defined-contribution retirement plan offered by employers?

Accepted Answer

A) 401(k)plan,403-b plan 
B) SEP 
C) ESOP 
D) Keogh plan 
A) 401(k)plan,403-b plan 
B) SEP 
C) ESOP 
D) Keogh plan

Question 3

Which of the following is false about a 401(k)plan?

Accepted Answer

A) Withdrawals before age 59-1/2 result in a 10 percent tax penalty 
B) Less than 50% of all employers offering these plans match a portion of employee's contributions 
C) Your contributions are limited to a set dollar amount each year 
D) The money you contribute is deducted from your paycheck before taxes are assessed 
A) Withdrawals before age 59-1/2 result in a 10 percent tax penalty 
B) Less than 50% of all employers offering these plans match a portion of employee's contributions 
C) Your contributions are limited to a set dollar amount each year 
D) The money you contribute is deducted from your paycheck before taxes are assessed

Question 4

An annuity is similar to an IRA in that money accumulates tax-free during the build-up period.

Accepted Answer

A) True 
 B)False

Question 5

Defined-contribution employer-sponsored retirement plans provide you a specific amount of income when you retire,based on factors such as your salary and years of employment.

Accepted Answer

A) True 
 B)False

Question 6

An individual retirement account in which capital gains and earnings on your investments will not be taxed upon withdrawal at age 59-1/2 is a(n)________.

Accepted Answer

The answer of An individual retirement account in which capital...

Question 7

A ________ is established to transfer assets tax-free from a company retirement plan.

Accepted Answer

A) SEP 
B) traditional IRA 
C) rollover IRA 
D) Keogh 
A) SEP 
B) traditional IRA 
C) rollover IRA 
D) Keogh

Question 8

You can elect to receive Social Security retirement benefits

Accepted Answer

A) at the normal retirement age,which is being raised from 65 to 69. 
B) at age 62 and take a reduced amount. 
C) and limit your ability to keep on working and earning income. 
D) and not be taxed on them,no matter how much money you make. 
A) at the normal retirement age,which is being raised from 65 to 69. 
B) at age 62 and take a reduced amount. 
C) and limit your ability to keep on working and earning income. 
D) and not be taxed on them,no matter how much money you make.

Question 9

Once you leave a job with an employer,you will probably forfeit your retirement account unless you have been with the company for 15 or more years.

Accepted Answer

A) True 
 B)False

Question 10

If your employer offers a retirement plan,that should be the first plan that you consider because your employer will likely contribute to it.

Accepted Answer

A) True 
 B)False

Question 11

A(n)________ annuity provides a specific return on your investment so you know how much money you will receive at a future point.

Accepted Answer

A) guaranteed 
B) fixed 
C) variable 
D) insured 
A) guaranteed 
B) fixed 
C) variable 
D) insured

Question 12

Which of the following is not a characteristic of employer-sponsored retirement plans?

Accepted Answer

A) Help you save 
B) Generally of two types 
C) Part of a good benefits package 
D) A good place from which to borrow 
A) Help you save 
B) Generally of two types 
C) Part of a good benefits package 
D) A good place from which to borrow

Question 13

You get a job with the Allred Corporation.Their retirement plan will pay you $250 a month for each year you work for the company commencing on your 65th birthday.You must work for the company for 10 years in order to qualify for the pension.This plan is a

Accepted Answer

A) defined-benefit plan. 
B) defined-contribution plan. 
C) traditional IRA. 
D) Keogh plan. 
A) defined-benefit plan. 
B) defined-contribution plan. 
C) traditional IRA. 
D) Keogh plan.

Question 14

Most defined-contribution plans allow some investment flexibility and allow you to choose all of the following except

Accepted Answer

A) money market funds. 
B) stock mutual funds. 
C) bond mutual funds. 
D) put and call options. 
A) money market funds. 
B) stock mutual funds. 
C) bond mutual funds. 
D) put and call options.

Question 15

Which of the following is true about a 401(k)plan?

Accepted Answer

A) There is no penalty for early withdrawal of these funds 
B) There is no limit on the dollar amount you can contribute 
C) Your contributions are automatically vested and are yours,regardless of when you leave the firm 
D) 401(k)contributions are made after taxes are paid on your salary 
A) There is no penalty for early withdrawal of these funds 
B) There is no limit on the dollar amount you can contribute 
C) Your contributions are automatically vested and are yours,regardless of when you leave the firm 
D) 401(k)contributions are made after taxes are paid on your salary

Question 16

If you are about to invest in a stock that has excellent growth potential over the next few years and the investment is to be part of your retirement,the best place to do this would be in a

Accepted Answer

A) bank trust account. 
B) Roth IRA. 
C) rollover IRA. 
D) regular brokerage account. 
A) bank trust account. 
B) Roth IRA. 
C) rollover IRA. 
D) regular brokerage account.

Question 17

More than 80 percent of all employers offering 401(k)plans match a portion or all of an employee's contributions.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following investments is least likely to be allowed with most defined-contribution plans?

Accepted Answer

A) Stock mutual funds 
B) Bond mutual funds 
C) Money market funds 
D) Individual corporate bonds 
A) Stock mutual funds 
B) Bond mutual funds 
C) Money market funds 
D) Individual corporate bonds

Question 19

When you contribute to a retirement account,it is usually with ________ dollars.

Accepted Answer

A) after-tax 
B) pre-tax 
C) optional 
D) discretionary 
A) after-tax 
B) pre-tax 
C) optional 
D) discretionary

Question 20

The FICA taxes you pay include Social Security and

Accepted Answer

A) are intended to provide a comfortable lifestyle to retired individuals. 
B) are matched two to one by your employer. 
C) Medicare taxes shared by employees and employers. 
D) are all capped at certain income levels. 
A) are intended to provide a comfortable lifestyle to retired individuals. 
B) are matched two to one by your employer. 
C) Medicare taxes shared by employees and employers. 
D) are all capped at certain income levels.

Exam 19: Retirement Planning

Key retirement planning decisions are all of the following except

Which of the following is not a defined-contribution retirement plan offered by employers?

Which of the following is false about a 401(k)plan?

An annuity is similar to an IRA in that money accumulates tax-free during the build-up period.

Defined-contribution employer-sponsored retirement plans provide you a specific amount of income when you retire,based on factors such as your salary and years of employment.

An individual retirement account in which capital gains and earnings on your investments will not be taxed upon withdrawal at age 59-1/2 is a(n)________.

A ________ is established to transfer assets tax-free from a company retirement plan.

You can elect to receive Social Security retirement benefits

Once you leave a job with an employer,you will probably forfeit your retirement account unless you have been with the company for 15 or more years.

If your employer offers a retirement plan,that should be the first plan that you consider because your employer will likely contribute to it.

A(n)________ annuity provides a specific return on your investment so you know how much money you will receive at a future point.

Which of the following is not a characteristic of employer-sponsored retirement plans?

You get a job with the Allred Corporation.Their retirement plan will pay you $250 a month for each year you work for the company commencing on your 65th birthday.You must work for the company for 10 years in order to qualify for the pension.This plan is a

Most defined-contribution plans allow some investment flexibility and allow you to choose all of the following except

Which of the following is true about a 401(k)plan?

If you are about to invest in a stock that has excellent growth potential over the next few years and the investment is to be part of your retirement,the best place to do this would be in a

More than 80 percent of all employers offering 401(k)plans match a portion or all of an employee's contributions.

Which of the following investments is least likely to be allowed with most defined-contribution plans?

When you contribute to a retirement account,it is usually with ________ dollars.

The FICA taxes you pay include Social Security and

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

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