Exam 14: Planning for Retirement

To qualify for full retirement benefits,a worker must be employed in a job covered by Social Security for at least 40 consecutive quarters.

In short-term retirement planning,you estimate the required level of retirement income as a percentage of current income,fund that amount,and then adjust that number every 3 to 5 years.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -If your employer matches your 401(k)contributions,you should contribute at least [the maximum allowed for tax deferral | the amount matched by your employer].

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -[SEPs | ESAs] can be set up to fund the future education cost of a child.

Marcia works for Telephonic Industries and participates in its thrift and savings plan.For every $1.00 Marcia contributes to the plan,up to 4 percent of her salary,the company contributes $0.50.Which of the following accurately describe this plan?

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -[401(k)| 403(b)] plans would be available for employees of a public,non-profit organization.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Kurt receives Social Security benefits and also received $55,000 wages during the year.His Social Security benefits will be [totally | partially] taxable.

Annuity premiums are paid to the insurance company during the accumulation period.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -[SEP | Keogh] plans are easier to administer.

A company using cliff vesting would legally have to give you vesting rights if you worked at a company three or more years.

Earned income has accounted for a growing amount of total retirement income.

Most people are too conservative when investing their retirement funds.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -The major source of retirement income for current retirees is [Social Security | personal savings].

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Returns from annuities can be [significant | disappointing].

Having an accurate current income and expenditures statement would be very useful when calculating retirement needs.

Workers who retire early receive _________ percent of the full amount of Social Security.

The amount accumulated in a defined contribution plan will be determined,at least in part,by the investment performance of the retirement funds.

Annuity proceeds are limited to the life of one person.

A graded vesting schedule would legally have to give you some vesting rights even though you worked at a company only one year.

The advantage of profit-sharing plans that invest in their own company stock is that the minimum value of the stock is guaranteed.