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. -With a [fixed rate | variable] annuity,you would receive a guaranteed payment regardless of the investment activity of the investment funds.

The cost of an annuity varies with the:

One can maximize the monthly Social Security benefit amount by delaying taking retirement benefits until the age:

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

The need for retirement planning is increased by the uncertainties of:

Once you begin drawing Social Security benefits,you will receive a fixed level of income for the remainder of your life.

Depending on your age,Social Security retirement benefits could be reduced because of employment income.

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

You would most likely purchase an annuity from a bank.

Early death results in the loss of annuity capital in a pure life annuity.

A major advantage of an annuity is that you cannot outlive your financial resources.

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 will be responsible for making investment choices when the employer offers a [401(k)plan | defined benefit plan].

The third step in retirement planning is to formulate an investment program.

Will works for Micro Lance Computer Company and participates in its thrift and savings plan.For every $1.00 Will contributes to the plan,up to 5 percent of his salary,the company contributes $0.25.If Will's salary is $40,000 and he decides to maximize the matching contributions,how much will be contributed to Will's plan in a year by both the employer and Will?

_____ are exclusively for the self-employed person and his/her employees.

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 [the maximum allowed for tax deferrable | at least the amount matched by your employer].

Annuities may provide survivor's benefits.

Household expenses usually increase after 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 first step in retirement planning is to [set retirement goals | decide how much money you can afford to set aside for retirement].

The amount of your Social Security contribution depends on: