Exam 14: Planning for Retirement

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 employee is subject to the investment risk in a defined [contribution | benefit] plan.

The major financial benefit of beginning your retirement funding early is related to

A 401(k)plan allows you to defer taxes on part of your income.

Mary Ann contributed $5,000 to her 401(k)plan.If Mary Ann is in the 15% marginal tax bracket,this retirement contribution saved her approximately ____ in federal income taxes.

Employees of a nonprofit corporation can contribute to a(n)

The amount of your social security contribution depends on

More than 50 percent of all wage earners and salaried workers today are covered by some type of employer-sponsored retirement or profit-sharing 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. -You have just begun working at ABC Corporation.Participation in the company's 401(k)plan will probably be [voluntary | mandatory].

Employees of state and local governments cannot participate in the Social Security system.

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. -You [can | cannot] write off losses from the sale of securities held in an IRA.

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. -About [20 | 40] percent of people have not calculated how much they need to retire.

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. -A Roth IRA will be funded with [pre | post] tax dollars.

The employee contributions limits for 401(k)plans are the same as those for 403(b)and 457 plans.

A large selection of investment types can qualify as IRA investments.

Payments from a defined benefits plan will be determined by the investment performance of the retirement funds.

All contributions to Roth 401(k)plans are made in after-tax dollars.

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. -For most people,participation in the Social Security system is [voluntary | mandatory].

What are the tax characteristics of qualified pension plans?

Social security benefits alone can usually fund a comfortable retirement.

If one is unsure about the facts needed to estimate retirement needs,it is better to do nothing for a few years.