Question 1

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

Accepted Answer

A) True 
 B)False  True

Question 2

Your Social Security retirement benefits are determined primarily by the amount

Accepted Answer

A)  of current contributions by other employees. 
B)  of savings you have. 
C)  you contributed to Social Security over the years. 
D)  of the prime interest rate. 
A)  of current contributions by other employees. 
B)  of savings you have. 
C)  you contributed to Social Security over the years. 
D)  of the prime interest rate. C

Question 3

Vesting means that employees have a claim to a portion of the retirement money that has been reserved for them upon retirement.

Accepted Answer

A) True 
 B)False  True

Question 4

How much to contribute to a retirement plan should not depend on your

Accepted Answer

A)  liquidity. 
B)  age. 
C)  other investments. 
D)  mood at the time. 
A)  liquidity. 
B)  age. 
C)  other investments. 
D)  mood at the time.

Question 5

Many employers have eliminated defined benefit retirement plans for employees because

Accepted Answer

A)  the employees did not appreciate the benefit. 
B)  the employees were reluctant to contribute to the plans. 
C)  the cost to the employer and long term liability became overwhelming. 
D)  All of the above are correct. 
A)  the employees did not appreciate the benefit. 
B)  the employees were reluctant to contribute to the plans. 
C)  the cost to the employer and long term liability became overwhelming. 
D)  All of the above are correct.

Question 6

In retirement planning,which of the following is false?

Accepted Answer

A)  Social Security benefits are enough for retirement for most people. 
B)  IRAs can be a good way to provide for retirement. 
C)  You can continue to work and receive Social Security benefits at the same time. 
D)  There is some concern about whether full Social Security benefits will be available in the future. 
A)  Social Security benefits are enough for retirement for most people. 
B)  IRAs can be a good way to provide for retirement. 
C)  You can continue to work and receive Social Security benefits at the same time. 
D)  There is some concern about whether full Social Security benefits will be available in the future.

Question 7

In determining the amount of money you will need for retirement,you should consider all of the following except

Accepted Answer

A)  your personal needs and who else you will be supporting. 
B)  the expected cost of living due to inflation. 
C)  the number of years you expect to live while retired. 
D)  inheritance from your children. 
A)  your personal needs and who else you will be supporting. 
B)  the expected cost of living due to inflation. 
C)  the number of years you expect to live while retired. 
D)  inheritance from your children.

Question 8

To qualify for Social Security benefits,your income has to be at least ________ per quarter (in 2015)for the equivalent of 10 years.

Accepted Answer

A)  $730 
B)  $874 
C)  $1,220 
D)  $1,123 
A)  $730 
B)  $874 
C)  $1,220 
D)  $1,123

Question 9

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

Accepted Answer

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

Question 10

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 11

Under federal guidelines,the 2015 maximum contribution to a 401(k)is

Accepted Answer

A)  $18,000. 
B)  80% of gross income. 
C)  $400 per month. 
D)  There is no limit. 
A)  $18,000. 
B)  80% of gross income. 
C)  $400 per month. 
D)  There is no limit.

Question 12

Bill is self-employed and has established a SEP retirement plan.Bill's net income for 2015 is $74,500.How much can Bill contribute to the SEP?

Accepted Answer

A)  $40,000 
B)  $17,000 
C)  $18,625 
D)  $11,500 
A)  $40,000 
B)  $17,000 
C)  $18,625 
D)  $11,500

Question 13

Generally,there are tax penalties for withdrawals from a traditional IRA before the age of

Accepted Answer

A)  59 1/2. 
B)  60. 
C)  67 full retirement age. 
D)  all of the above. 
A)  59 1/2. 
B)  60. 
C)  67 full retirement age. 
D)  all of the above.

Question 14

Which of the following employers would be most likely to offer a 403(b)plan?

Accepted Answer

A)  General Motors 
B)  Wright State University 
C)  Duke Electric Power Company 
D)  SBC Corporation 
A)  General Motors 
B)  Wright State University 
C)  Duke Electric Power Company 
D)  SBC Corporation

Question 15

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

Accepted Answer

A)  Withdrawals before age 59 1/2 result in a 10% 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 pay before taxes are assessed. 
A)  Withdrawals before age 59 1/2 result in a 10% 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 pay before taxes are assessed.

Question 16

How much would need to be contributed each year for 30 years to accumulate $1,300,000 assuming a return on the investments of 8%? Round to the nearest dollar if needed.

Accepted Answer

A)  $43,333 
B)  $46,800 
C)  $11,476 
D)  $15,000 
A)  $43,333 
B)  $46,800 
C)  $11,476 
D)  $15,000

Question 17

Social Security benefits vary among states,as the system is administered by the individual states.

Accepted Answer

A) True 
 B)False

Question 18

Key retirement planning decisions include 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 19

Jim is self employed and had a "banner" year in 2015,earning $350,000 net income.He wanted to make a significant contribution to his retirement planning and set up a SEP plan.Since the plan allows for contributions up to 25% of net income,his maximum contribution was

Accepted Answer

A)  $53,000. 
B)  $87,500. 
C)  $75,000. 
D)  $63,000. 
A)  $53,000. 
B)  $87,500. 
C)  $75,000. 
D)  $63,000.

Question 20

If you are age 60,which of the following investments would you most likely not consider?

Accepted Answer

A)  Money market funds 
B)  Junk bond funds 
C)  Treasury bonds 
D)  CDs 
A)  Money market funds 
B)  Junk bond funds 
C)  Treasury bonds 
D)  CDs

Exam 19: Retirement Planning

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

Your Social Security retirement benefits are determined primarily by the amount

Vesting means that employees have a claim to a portion of the retirement money that has been reserved for them upon retirement.

How much to contribute to a retirement plan should not depend on your

Many employers have eliminated defined benefit retirement plans for employees because

In retirement planning,which of the following is false?

In determining the amount of money you will need for retirement,you should consider all of the following except

To qualify for Social Security benefits,your income has to be at least ________ per quarter (in 2015)for the equivalent of 10 years.

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

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

Under federal guidelines,the 2015 maximum contribution to a 401(k)is

Bill is self-employed and has established a SEP retirement plan.Bill's net income for 2015 is $74,500.How much can Bill contribute to the SEP?

Generally,there are tax penalties for withdrawals from a traditional IRA before the age of

Which of the following employers would be most likely to offer a 403(b)plan?

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

How much would need to be contributed each year for 30 years to accumulate $1,300,000 assuming a return on the investments of 8%? Round to the nearest dollar if needed.

Social Security benefits vary among states,as the system is administered by the individual states.

Key retirement planning decisions include all of the following except

Jim is self employed and had a "banner" year in 2015,earning $350,000 net income.He wanted to make a significant contribution to his retirement planning and set up a SEP plan.Since the plan allows for contributions up to 25% of net income,his maximum contribution was

If you are age 60,which of the following investments would you most likely not consider?

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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