Exam 14: Planning for Retirement

The period during which annuity payments are made is called the distribution period.

The Employee Retirement Income Security Act (ERISA)provides:

The fees on annuities tend to be high compared to mutual 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. -With a life annuity,period certain,a payment will be made for a stated period of time [only to the annuitant if she lives | to someone else if the annuitant dies].

Social Security is meant to be a retirement income supplement.

Starting later in life and being too conservative when investing are both common retirement planning mistakes.

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. -Roth IRAs can be opened by couples filing jointly with adjusted gross incomes in 2015 of up to [$183,000 |$173,000],whether or not they have other retirement or pension plans

The maximum contribution to Keogh plan in 2015 is $53,000 or 25 percent of earned income for sole proprietors.

The period during which premiums are paid for the purchase of an annuity is called the:

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].

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.

Jacque Solis (age 38)is leaving her current job and would like to take a long vacation before starting new employment.She has $58,000 in a qualified plan that she would like to live on during this period.If she is in a 25 percent marginal tax bracket,how much will she have left after paying taxes and penalties?

Government assistance,primarily Social Security,is the largest single source of income for the average retiree.

Most people are too conservative when investing their retirement funds.

One often has to make investment decision if you have a _____ 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. -There is a [5% | 10%] federal income tax penalty for pension plan withdrawals before age 59 1/2.

A vested employee has a right to receive benefits from an employer's retirement funds even if he no longer works there.

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.

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

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. -Harry starts taking reduced retirement benefits at age 62.Those benefits [will | will not] be increased when he reaches normal retirement age.