Question 1

The Keogh plan is a retirement plan for individuals who work for large multinational corporations.

Accepted Answer

A) True 
 B)False

Question 2

Tran is employed at a company that annually contributes anywhere from 2% up to 12% of his salary into his retirement plan,depending on how good the company's financials were that year.This type of contribution plan is a(n)________ plan.

Accepted Answer

A) 401(k) 
B) ESOP 
C) profit-sharing 
D) performance 
A) 401(k) 
B) ESOP 
C) profit-sharing 
D) performance

Question 3

Congratulations! You have just retired with $1.4 million dollars in your 401(k)plan.You will be receiving a fairly large Social Security check and you have adequate personal savings outside of your 401(k)to live on for several years.You don't want to lock up your retirement money into an annuity because you want to be flexible for the future.What would be your best option?

Accepted Answer

A) Purchase an early withdrawal annuity. 
B) Roll over the balance into a qualified IRA account. 
C) Hire a Certified Financial Planner for investing advice. 
D) All of the above are correct. 
E) Only B and C are correct. 
A) Purchase an early withdrawal annuity. 
B) Roll over the balance into a qualified IRA account. 
C) Hire a Certified Financial Planner for investing advice. 
D) All of the above are correct. 
E) Only B and C are correct.

Question 4

A(n)________ is a tax-deferred retirement plan that is essentially the same as a 401(k)plan,except that it is aimed at employees of schools and charitable organizations.

Accepted Answer

A) 404(a) 
B) 402(b) 
C) 403(b) 
D) 007(a) 
E) none of the above 
A) 404(a) 
B) 402(b) 
C) 403(b) 
D) 007(a) 
E) none of the above

Question 5

401(k)and 403(b)plans are the most common retirement plans these days.What are the big advantages to employees with these plans?

Accepted Answer

A) You don't pay taxes on money contributed to 401(k)plans. 
B) Earnings on your retirement account are tax deferred. 
C) Many firms contribute an employer match,which represents a 100% risk-free return to the employee. 
D) All of the above are correct. 
E) Only A and C are correct. 
A) You don't pay taxes on money contributed to 401(k)plans. 
B) Earnings on your retirement account are tax deferred. 
C) Many firms contribute an employer match,which represents a 100% risk-free return to the employee. 
D) All of the above are correct. 
E) Only A and C are correct.

Question 6

Depending on the state ,a 529 plan allows an individual to invest how much money tax free for college expenses?

Accepted Answer

A) $500,000 - $750,000 
B) $250,000 - $380,000 
C) $100,000 - $225,000 
D) $50,000 - $90,000 
A) $500,000 - $750,000 
B) $250,000 - $380,000 
C) $100,000 - $225,000 
D) $50,000 - $90,000

Question 7

Once May Lou starts receiving her $1,200 monthly annuity payments she will pay income tax as if the annuity were

Accepted Answer

A) tax-deferred. 
B) tax-sheltered. 
C) tax-exempt. 
D) tax-free income. 
E) normal income. 
A) tax-deferred. 
B) tax-sheltered. 
C) tax-exempt. 
D) tax-free income. 
E) normal income.

Question 8

A(n)________ is a pension plan in which you and your employer or your employer alone contribute funds directly to a retirement account set aside specifically for you.

Accepted Answer

A) defined-benefit plan 
B) cash balance plan 
C) defined-contribution plan 
D) percentage plus inflation plan 
E) none of the above 
A) defined-benefit plan 
B) cash balance plan 
C) defined-contribution plan 
D) percentage plus inflation plan 
E) none of the above

Question 9

One of the drawbacks to defined-benefit plans are their lack of portability,meaning that if you leave the company the value of the pension is not likely to go with you.

Accepted Answer

A) True 
 B)False

Question 10

Your company pays retirement benefits to current retirees out of current earnings,on a pay-as-you-go basis.This is an example of a(n)

Accepted Answer

A) unfunded pension plan. 
B) funded pension plan. 
C) cash balance plan. 
D) none of the above. 
A) unfunded pension plan. 
B) funded pension plan. 
C) cash balance plan. 
D) none of the above.

Question 11

When is rolling your lump-sum retirement benefits into an IRA a good financial decision?

Accepted Answer

A) If you have taken a new job 
B) If you have retired early 
C) If you don't need the funds immediately 
D) All of the above are correct. 
E) Only A and C are correct. 
A) If you have taken a new job 
B) If you have retired early 
C) If you don't need the funds immediately 
D) All of the above are correct. 
E) Only A and C are correct.

Question 12

For someone wanting to minimize the taxes they are paying now,a Roth IRA would be preferable to a traditional IRA.

Accepted Answer

A) True 
 B)False

Question 13

How does one set up a qualified individual retirement account?

Accepted Answer

Because of the IRS regulations concernin

Question 14

When an employer makes pension fund contributions directly to a trustee who holds and invests those funds,the plan is said to be a(n)

Accepted Answer

A) defined-contribution plan. 
B) funded pension plan. 
C) unfunded pension plan. 
D) cash balance plan. 
E) none of the above. 
A) defined-contribution plan. 
B) funded pension plan. 
C) unfunded pension plan. 
D) cash balance plan. 
E) none of the above.

Question 15

It is a good idea to start saving for retirement as early as possible to take advantage of compounding returns on your savings.

Accepted Answer

A) True 
 B)False

Question 16

Under a funded pension plan,the employer makes regular contributions to a trustee who collects and invests the retirement funds.

Accepted Answer

A) True 
 B)False

Question 17

Under the annuity for life policy your payments will continue to your beneficiaries upon your passing up until a specified time.

Accepted Answer

A) True 
 B)False

Question 18

A person may have more than one qualified retirement plan open at the same time.

Accepted Answer

A) True 
 B)False

Question 19

According to the author,401(k)plans are actually do it yourself variation of a profit-sharing/thrift plan.

Accepted Answer

A) True 
 B)False

Question 20

Erica works for a company with a 401(k)plan.The company matches at $0.50 on the dollar the first 6% of the employee's salary contributed to the 401(k).If Erica earns $90,000 and contributes 12% of her salary,how much will the employer match be in dollars for the year?

Accepted Answer

A) $1,400 
B) $2,700 
C) $3,500 
D) $6,200 
A) $1,400 
B) $2,700 
C) $3,500 
D) $6,200

The Keogh plan is a retirement plan for individuals who work for large multinational corporations.

Tran is employed at a company that annually contributes anywhere from 2% up to 12% of his salary into his retirement plan,depending on how good the company's financials were that year.This type of contribution plan is a(n)________ plan.

A(n)________ is a tax-deferred retirement plan that is essentially the same as a 401(k)plan,except that it is aimed at employees of schools and charitable organizations.

401(k)and 403(b)plans are the most common retirement plans these days.What are the big advantages to employees with these plans?

Depending on the state ,a 529 plan allows an individual to invest how much money tax free for college expenses?

Once May Lou starts receiving her $1,200 monthly annuity payments she will pay income tax as if the annuity were

A(n)________ is a pension plan in which you and your employer or your employer alone contribute funds directly to a retirement account set aside specifically for you.

One of the drawbacks to defined-benefit plans are their lack of portability,meaning that if you leave the company the value of the pension is not likely to go with you.

Your company pays retirement benefits to current retirees out of current earnings,on a pay-as-you-go basis.This is an example of a(n)

When is rolling your lump-sum retirement benefits into an IRA a good financial decision?

For someone wanting to minimize the taxes they are paying now,a Roth IRA would be preferable to a traditional IRA.

How does one set up a qualified individual retirement account?

When an employer makes pension fund contributions directly to a trustee who holds and invests those funds,the plan is said to be a(n)

It is a good idea to start saving for retirement as early as possible to take advantage of compounding returns on your savings.

Under a funded pension plan,the employer makes regular contributions to a trustee who collects and invests the retirement funds.

Under the annuity for life policy your payments will continue to your beneficiaries upon your passing up until a specified time.

A person may have more than one qualified retirement plan open at the same time.

According to the author,401(k)plans are actually do it yourself variation of a profit-sharing/thrift plan.

Erica works for a company with a 401(k)plan.The company matches at $0.50 on the dollar the first 6% of the employee's salary contributed to the 401(k).If Erica earns $90,000 and contributes 12% of her salary,how much will the employer match be in dollars for the year?

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: the Role of Open Credit

Student and Consumer Loans: the Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: an Easy Way to Diversify

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters

Exam 15: Retirement Planning

The Keogh plan is a retirement plan for individuals who work for large multinational corporations.

Tran is employed at a company that annually contributes anywhere from 2% up to 12% of his salary into his retirement plan,depending on how good the company's financials were that year.This type of contribution plan is a(n)________ plan.

A(n)________ is a tax-deferred retirement plan that is essentially the same as a 401(k)plan,except that it is aimed at employees of schools and charitable organizations.

401(k)and 403(b)plans are the most common retirement plans these days.What are the big advantages to employees with these plans?

Depending on the state ,a 529 plan allows an individual to invest how much money tax free for college expenses?

Once May Lou starts receiving her $1,200 monthly annuity payments she will pay income tax as if the annuity were

A(n)________ is a pension plan in which you and your employer or your employer alone contribute funds directly to a retirement account set aside specifically for you.

One of the drawbacks to defined-benefit plans are their lack of portability,meaning that if you leave the company the value of the pension is not likely to go with you.

Your company pays retirement benefits to current retirees out of current earnings,on a pay-as-you-go basis.This is an example of a(n)

When is rolling your lump-sum retirement benefits into an IRA a good financial decision?

For someone wanting to minimize the taxes they are paying now,a Roth IRA would be preferable to a traditional IRA.

How does one set up a qualified individual retirement account?

When an employer makes pension fund contributions directly to a trustee who holds and invests those funds,the plan is said to be a(n)

It is a good idea to start saving for retirement as early as possible to take advantage of compounding returns on your savings.

Under a funded pension plan,the employer makes regular contributions to a trustee who collects and invests the retirement funds.

Under the annuity for life policy your payments will continue to your beneficiaries upon your passing up until a specified time.

A person may have more than one qualified retirement plan open at the same time.

According to the author,401(k)plans are actually do it yourself variation of a profit-sharing/thrift plan.

Erica works for a company with a 401(k)plan.The company matches at $0.50 on the dollar the first 6% of the employee's salary contributed to the 401(k).If Erica earns $90,000 and contributes 12% of her salary,how much will the employer match be in dollars for the year?

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: the Role of Open Credit

Student and Consumer Loans: the Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: an Easy Way to Diversify

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters