Question 1

Employers who want flexibility in how much they contribute to their employees' retirement plans would want to consider adopting a _____ plan.

Accepted Answer

A)  qualified defined contribution 
B)  cash balance 
C)  defined benefit 
D)  profit sharing 
E)  403(b) 
A)  qualified defined contribution 
B)  cash balance 
C)  defined benefit 
D)  profit sharing 
E)  403(b)

Question 2

The major mistake people make in retirement planning is:

Accepted Answer

A)  starting too late. 
B)  saving too little. 
C)  investing too conservatively. 
D)  a and b 
E)  a,b,and c 
A)  starting too late. 
B)  saving too little. 
C)  investing too conservatively. 
D)  a and b 
E)  a,b,and c

Question 3

The two most common sources of retirement income for most people are Social Security and pensions.

Accepted Answer

A) True 
 B)False

Question 4

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?

Accepted Answer

A)  It's a defined benefit plan. 
B)  It's a non-contributory plan. 
C)  It's a cash balance plan. 
D)  It's a matching plan. 
E)  It's a profit-sharing plan. 
A)  It's a defined benefit plan. 
B)  It's a non-contributory plan. 
C)  It's a cash balance plan. 
D)  It's a matching plan. 
E)  It's a profit-sharing plan.

Question 5

_____ do not have to be covered by Social Security coverage.

Accepted Answer

A)  Farmers and ministers 
B)  Federal civilian employees hired before 1984 and employees of state and local governments 
C)  Federal employees and ministers 
D)  Teachers and employees of universities 
E)  Ministers and professional athletes 
A)  Farmers and ministers 
B)  Federal civilian employees hired before 1984 and employees of state and local governments 
C)  Federal employees and ministers 
D)  Teachers and employees of universities 
E)  Ministers and professional athletes

Question 6

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.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 7

Which is not a common mistake people make when planning for retirement?

Accepted Answer

A)  Starting too late 
B)  Putting away too little 
C)  Assuming too much risk 
D)  Having too little when reaching retirement 
E)  None of the above 
A)  Starting too late 
B)  Putting away too little 
C)  Assuming too much risk 
D)  Having too little when reaching retirement 
E)  None of the above

Question 8

Annuities are administered by:

Accepted Answer

A)  banks. 
B)  brokerage houses. 
C)  insurance companies. 
D)  mutual fund companies. 
E)  all of the above 
A)  banks. 
B)  brokerage houses. 
C)  insurance companies. 
D)  mutual fund companies. 
E)  all of the above

Question 9

Danielle puts 8 percent of her paycheck in a 401(k)plan administered by her employer.Danielle earns $55,000 per year and is in the 28 percent tax category.What annual tax savings does she get from her contribution? If her employer matches contributions on the first 5% of her salary dollar for dollar and the second 5% 50 cents on the dollar,how much will her employer put into her account this year?

Accepted Answer

Contribution = 0 08 × $55,000 = $4,400
T

Question 10

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 defined [contribution | benefit] retirement plan would usually be better for a younger worker who changes employers every five years.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 11

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.
-Inflation will have [little | great] impact on your retirement plans.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 12

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 establish.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 13

Home Appliance Warehouse,Inc.would like to set up a retirement plan for its employees that encourage employees to save for their own retirement.The company is willing to match employee contributions.Which of the following plans would be appropriate in this situation?

Accepted Answer

A)  Cash balance plan 
B)  403(b)plan 
C)  457 plan 
D)  401(k)plan 
E)  b,c,and d 
A)  Cash balance plan 
B)  403(b)plan 
C)  457 plan 
D)  401(k)plan 
E)  b,c,and d

Question 14

SEP plans are designed for self-employed individuals.

Accepted Answer

A) True 
 B)False

Question 15

Gordon and Lisa estimate that they will need $1,875,000 in 40 years for their retirement years.If they can earn 8 percent annually on their funds,how much do they need to save annually?

Accepted Answer

A)  $7,238 
B)  $7,987 
C)  $8,103 
D)  $9,234 
E)  $9,875 
A)  $7,238 
B)  $7,987 
C)  $8,103 
D)  $9,234 
E)  $9,875

Question 16

Which of the following types of retirement plans is becoming less common?

Accepted Answer

A)  Traditional defined contribution 
B)  Traditional defined benefit 
C)  Cash balance 
D)  401(k) 
E)  Keogh 
A)  Traditional defined contribution 
B)  Traditional defined benefit 
C)  Cash balance 
D)  401(k) 
E)  Keogh

Question 17

Workers,born in 1960 or later,who elect to retire early-at age 62-will receive reduced Social Security benefits,currently _____ of the full amount

Accepted Answer

A)  20% to 30% 
B)  50% to 60% 
C)  60% to 70% 
D)  70% to 80% 
E)  80% to 90% 
A)  20% to 30% 
B)  50% to 60% 
C)  60% to 70% 
D)  70% to 80% 
E)  80% to 90%

Question 18

Eric works for a company with a defined contribution benefit pension plan.He will retire in ten years (at age 65)and expects his salary to be $100,000 in his last year of work.Social Security should pay him $1,325 per month at that time.If he needs 80 percent of his income to maintain his standard of living upon retirement,how much annual income will he need from his employer's plan and from his own planning when he retires?

Accepted Answer

Social Security = $1,325 × 12

Question 19

The major mistake people make in retirement planning is:

Accepted Answer

A)  starting too early. 
B)  saving too little. 
C)  investing too aggressively. 
D)  a and b 
E)  a,b,and c 
A)  starting too early. 
B)  saving too little. 
C)  investing too aggressively. 
D)  a and b 
E)  a,b,and c

Question 20

In long-term retirement planning you decide on the required level of retirement income and funds needed over a 3 to 5 year series of intervals.

Accepted Answer

A) True 
 B)False

Employers who want flexibility in how much they contribute to their employees' retirement plans would want to consider adopting a _____ plan.

The major mistake people make in retirement planning is:

The two most common sources of retirement income for most people are Social Security and pensions.

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?

_____ do not have to be covered by Social Security coverage.

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.

Which is not a common mistake people make when planning for retirement?

Annuities are administered by:

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. -Inflation will have [little | great] impact on your retirement plans.

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 establish.

Home Appliance Warehouse,Inc.would like to set up a retirement plan for its employees that encourage employees to save for their own retirement.The company is willing to match employee contributions.Which of the following plans would be appropriate in this situation?

SEP plans are designed for self-employed individuals.

Gordon and Lisa estimate that they will need $1,875,000 in 40 years for their retirement years.If they can earn 8 percent annually on their funds,how much do they need to save annually?

Which of the following types of retirement plans is becoming less common?

Workers,born in 1960 or later,who elect to retire early-at age 62-will receive reduced Social Security benefits,currently _____ of the full amount

The major mistake people make in retirement planning is:

In long-term retirement planning you decide on the required level of retirement income and funds needed over a 3 to 5 year series of intervals.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Preserving Your Estate

Filters

Exam 14: Planning for Retirement

Employers who want flexibility in how much they contribute to their employees' retirement plans would want to consider adopting a _____ plan.

The major mistake people make in retirement planning is:

The two most common sources of retirement income for most people are Social Security and pensions.

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?

_____ do not have to be covered by Social Security coverage.

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.

Which is not a common mistake people make when planning for retirement?

Annuities are administered by:

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. -Inflation will have [little | great] impact on your retirement plans.

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 establish.

Home Appliance Warehouse,Inc.would like to set up a retirement plan for its employees that encourage employees to save for their own retirement.The company is willing to match employee contributions.Which of the following plans would be appropriate in this situation?

SEP plans are designed for self-employed individuals.

Gordon and Lisa estimate that they will need $1,875,000 in 40 years for their retirement years.If they can earn 8 percent annually on their funds,how much do they need to save annually?

Which of the following types of retirement plans is becoming less common?

Workers,born in 1960 or later,who elect to retire early-at age 62-will receive reduced Social Security benefits,currently _____ of the full amount

The major mistake people make in retirement planning is:

In long-term retirement planning you decide on the required level of retirement income and funds needed over a 3 to 5 year series of intervals.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Preserving Your Estate

Filters