Question 1

Both the SEP (Simplified Employee Pension)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 2

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 3

Under a SEP,an employee

Accepted Answer

A)  is not allowed to make contributions. 
B)  can contribute up to $6,000 per year. 
C)  is not taxed until his or her contributions are withdrawn. 
D)  can defer taxes with contributions. 
A)  is not allowed to make contributions. 
B)  can contribute up to $6,000 per year. 
C)  is not taxed until his or her contributions are withdrawn. 
D)  can defer taxes with contributions.

Question 4

Contributing to which of the following will give you an immediate tax benefit?

Accepted Answer

A)  Traditional IRA 
B)  Roth IRA 
C)  Rollover IRA 
D)  Regular brokerage account 
A)  Traditional IRA 
B)  Roth IRA 
C)  Rollover IRA 
D)  Regular brokerage account

Question 5

Which of the following statements with regard to SEP plans is not true?

Accepted Answer

A)  Self-employed individuals can contribute up to 25% of annual net income. 
B)  They are also called Keogh plans. 
C)  The maximum contribution in 2015 is $53,000. 
D)  A SEP is a defined-contribution plan. 
A)  Self-employed individuals can contribute up to 25% of annual net income. 
B)  They are also called Keogh plans. 
C)  The maximum contribution in 2015 is $53,000. 
D)  A SEP is a defined-contribution plan.

Question 6

Full Social Security retirement benefits begin at age 65 to 67 depending on what year you were born.

Accepted Answer

A) True 
 B)False

Question 7

The quality and timing of your retirement depend mainly on the quality of your employer's retirement plan.

Accepted Answer

A) True 
 B)False

Question 8

You can elect to receive Social Security retirement benefits

Accepted Answer

A)  at the full 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 other income you have. 
A)  at the full 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 other income you have.

Question 9

The tax characteristics of a Roth IRA and a traditional IRA differ in terms of initial contributions and withdrawals after retirement.

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

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 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

Assuming Social Security income is not absolutely necessary at age 62,the decision whether to begin receiving reduced payments at age 62 versus waiting for full retirement age is

Accepted Answer

A)  a financial analysis decision based on present value and life expectancy. 
B)  a moot point since the government tells you when you are eligible. 
C)  a decision based on expected inflation rates. 
D)  a moot point since you should take the money as soon as possible. 
A)  a financial analysis decision based on present value and life expectancy. 
B)  a moot point since the government tells you when you are eligible. 
C)  a decision based on expected inflation rates. 
D)  a moot point since you should take the money as soon as possible.

Question 14

Both the one-participant 401(k)plan and the Simplified Employee Pension (SEP)plan are available to self-employed individuals for retirement savings.

Accepted Answer

A) True 
 B)False

Question 15

Use the following two columns of items to answer the matching questions below:
-SEP

Accepted Answer

A) a defined contribution plan for small firms (1 - 10 employees) 
B) a retirement plan in which the employer contributes its own stock to the employee's retirement account 
C) a defined contribution plan in which the employer contributes to employee retirement accounts based on a specified profit formula 
D) a defined contribution plan that allows employees to contribute up to $18,000 per year in 2015 on a pre-tax basis 
A) a defined contribution plan for small firms (1 - 10 employees) 
B) a retirement plan in which the employer contributes its own stock to the employee's retirement account 
C) a defined contribution plan in which the employer contributes to employee retirement accounts based on a specified profit formula 
D) a defined contribution plan that allows employees to contribute up to $18,000 per year in 2015 on a pre-tax basis

Question 16

List three sources of income when you retire.

Accepted Answer

Social Security,IRAs,company pensions,em

Question 17

Describe two types of annuities.

Accepted Answer

Fixed annuities provide a specified retu

Question 18

All of the following is good advice on retirement planning and savings except

Accepted Answer

A)  start early. 
B)  take advantage of employer plans. 
C)  take advantage of tax savings. 
D)  if you are eligible for Social Security, you will not need to worry about additional savings. 
A)  start early. 
B)  take advantage of employer plans. 
C)  take advantage of tax savings. 
D)  if you are eligible for Social Security, you will not need to worry about additional savings.

Question 19

Since many employers have eliminated defined benefit retirement plans,it is important that the employee

Accepted Answer

A)  contributes to the 401(k) opportunity especially if there is company matching. 
B)  makes extra money to compensate for the loss of benefit. 
C)  saves money throughout their career to prepare for retirement. 
D)  Both A and C are correct. 
A)  contributes to the 401(k) opportunity especially if there is company matching. 
B)  makes extra money to compensate for the loss of benefit. 
C)  saves money throughout their career to prepare for retirement. 
D)  Both A and C are correct.

Question 20

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 for deductible contributions regardless of income. 
D)  A 10% 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 for deductible contributions regardless of income. 
D)  A 10% penalty normally applies if funds are withdrawn before age 59 1/2.

Exam 19: Retirement Planning

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

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

Under a SEP,an employee

Contributing to which of the following will give you an immediate tax benefit?

Which of the following statements with regard to SEP plans is not true?

Full Social Security retirement benefits begin at age 65 to 67 depending on what year you were born.

The quality and timing of your retirement depend mainly on the quality of your employer's retirement plan.

You can elect to receive Social Security retirement benefits

The tax characteristics of a Roth IRA and a traditional IRA differ in terms of initial contributions and withdrawals after retirement.

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

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

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

Assuming Social Security income is not absolutely necessary at age 62,the decision whether to begin receiving reduced payments at age 62 versus waiting for full retirement age is

Both the one-participant 401(k)plan and the Simplified Employee Pension (SEP)plan are available to self-employed individuals for retirement savings.

Use the following two columns of items to answer the matching questions below: -SEP

List three sources of income when you retire.

Describe two types of annuities.

All of the following is good advice on retirement planning and savings except

Since many employers have eliminated defined benefit retirement plans,it is important that the employee

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

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