Question 1

Individual retirement accounts (IRAs)are personal savings accounts that give you tax advantages for saving for retirement.

Accepted Answer

A) True 
 B)False

Question 2

Since the 2000s,the average personal savings rate in the U.S.has decreased.

Accepted Answer

A) True 
 B)False

Question 3

Because inflation makes goods and services cost more over time,one would be wise to always plan for inflation when planning one's retirement.

Accepted Answer

A) True 
 B)False

Question 4

Relate the pros and cons of defined-benefit plans.

Accepted Answer

Under a defined-benefit plan you receive

Question 5

Of the tax-favored retirement plans for the self-employed and small business employee,one is limited to $54,000 of annual contributions per person.It is the ________ plan.

Accepted Answer

A) Keogh 
B) SEP-IRA 
C) SIMPLE 
D) 401(k) 
E) thrift 
A) Keogh 
B) SEP-IRA 
C) SIMPLE 
D) 401(k) 
E) thrift

Question 6

Most employees in the United States today are covered by an employer funded defined-benefit plan.

Accepted Answer

A) True 
 B)False

Question 7

A ________ is defined by the fact that your employer provides all the funds for the retirement plan,without any contribution from you.

Accepted Answer

A) defined-benefit plan 
B) noncontributory retirement plan 
C) contributory retirement plan 
D) portable 
E) none of the above 
A) defined-benefit plan 
B) noncontributory retirement plan 
C) contributory retirement plan 
D) portable 
E) none of the above

Question 8

Why have many companies switched from traditional defined-benefits plans to cash-balance plans?

Accepted Answer

A) They want to shower their employees with money. 
B) Regulatory reform made it necessary. 
C) They save money with them as a result of reduced future benefits for older workers. 
D) All of the above are correct. 
E) Only B and C are correct. 
A) They want to shower their employees with money. 
B) Regulatory reform made it necessary. 
C) They save money with them as a result of reduced future benefits for older workers. 
D) All of the above are correct. 
E) Only B and C are correct.

Question 9

The only difference between a defined-benefit plan and a defined-contribution retirement plan is the tax deduction for the defined-contribution plan.

Accepted Answer

A) True 
 B)False

Question 10

Jahwana works for a large corporation with a 401(k)retirement plan.The company matches dollar for dollar the first 5% of the employee's salary contributed to the 401(k).Jahwana currently earns $40,000 in gross salary and she currently contributes 15% of her salary into her 401(k).How much money in dollars is the total contribution to her account every year?

Accepted Answer

A) $2,000 
B) $4,000 
C) $6,000 
D) $8,000 
A) $2,000 
B) $4,000 
C) $6,000 
D) $8,000

Question 11

Elaborate on the basics of annuities and payouts.

Accepted Answer

A single life annuity allows you to rece

Question 12

Suppose that you have estimated that,to provide for your retirement income,you will need $2,250,000 on deposit in your retirement account when you retire.You believe that you will earn an average of 11% on your retirement investments until you retire in 35 years.What must your annual deposits be to accumulate this total?

Accepted Answer

A) $21,991.14 
B) $6,586.85 
C) $5,904.84 
D) $6,878.77 
E) None of the above 
A) $21,991.14 
B) $6,586.85 
C) $5,904.84 
D) $6,878.77 
E) None of the above

Question 13

Social Security is a plan where current workers' contributions pay for current retiree's benefits.

Accepted Answer

A) True 
 B)False

Question 14

What advantage does the Roth IRA have over the traditional IRA?

Accepted Answer

A) Early withdrawals from a Roth are subject to penalities,so you won't be tempted to dip into your investment. 
B) Unlike the traditional IRA,with a Roth you don't pay taxes while your money is in the IRA. 
C) With a Roth you take care of taxes ahead of time and end up with more money to spend at retirement. 
D) Contributions to a Roth IRA are tax deductible. 
A) Early withdrawals from a Roth are subject to penalities,so you won't be tempted to dip into your investment. 
B) Unlike the traditional IRA,with a Roth you don't pay taxes while your money is in the IRA. 
C) With a Roth you take care of taxes ahead of time and end up with more money to spend at retirement. 
D) Contributions to a Roth IRA are tax deductible.

Question 15

One of the advantages to a traditional IRA is that it allows you to make a penalty-free withdrawal to purchase your first home.

Accepted Answer

A) True 
 B)False

Question 16

How is the size of a person's Social Security retirement benefits determined?

Accepted Answer

A) It depends on the number of credits earned in a person's lifetime. 
B) It depends on the average level of earning over a person's lifetime. 
C) It depends on the number of years a person has paid Social Security taxes. 
D) All of the above are correct. 
E) Only B and C are correct. 
A) It depends on the number of credits earned in a person's lifetime. 
B) It depends on the average level of earning over a person's lifetime. 
C) It depends on the number of years a person has paid Social Security taxes. 
D) All of the above are correct. 
E) Only B and C are correct.

Question 17

Which of the following benefits is not provided by Social Security?

Accepted Answer

A) Death 
B) Disability 
C) Education 
D) Health 
E) Retirement 
A) Death 
B) Disability 
C) Education 
D) Health 
E) Retirement

Question 18

What are some very important things to monitor concerning your retirement plan,both before and after retirement?

Accepted Answer

Inflation and tax policy will have an en

Question 19

You and your spouse both have good retirement plans through work and you both receive good Social Security checks based on your own incomes.If your goal is to maximize the size of your annuity check every month,which option should you choose?

Accepted Answer

A) Single Life Annuity 
B) Annuity for Life or Certain Period 
C) Joint and Survivor Annuity 
D) All annuities have equal payment amounts,so it doesn't matter which you choose. 
A) Single Life Annuity 
B) Annuity for Life or Certain Period 
C) Joint and Survivor Annuity 
D) All annuities have equal payment amounts,so it doesn't matter which you choose.

Question 20

If you have a defined-benefit retirement plan,you're considered an "inactive participant."

Accepted Answer

A) True 
 B)False

Individual retirement accounts (IRAs)are personal savings accounts that give you tax advantages for saving for retirement.

Since the 2000s,the average personal savings rate in the U.S.has decreased.

Because inflation makes goods and services cost more over time,one would be wise to always plan for inflation when planning one's retirement.

Relate the pros and cons of defined-benefit plans.

Of the tax-favored retirement plans for the self-employed and small business employee,one is limited to $54,000 of annual contributions per person.It is the ________ plan.

Most employees in the United States today are covered by an employer funded defined-benefit plan.

A ________ is defined by the fact that your employer provides all the funds for the retirement plan,without any contribution from you.

Why have many companies switched from traditional defined-benefits plans to cash-balance plans?

The only difference between a defined-benefit plan and a defined-contribution retirement plan is the tax deduction for the defined-contribution plan.

Elaborate on the basics of annuities and payouts.

Social Security is a plan where current workers' contributions pay for current retiree's benefits.

What advantage does the Roth IRA have over the traditional IRA?

One of the advantages to a traditional IRA is that it allows you to make a penalty-free withdrawal to purchase your first home.

How is the size of a person's Social Security retirement benefits determined?

Which of the following benefits is not provided by Social Security?

What are some very important things to monitor concerning your retirement plan,both before and after retirement?

You and your spouse both have good retirement plans through work and you both receive good Social Security checks based on your own incomes.If your goal is to maximize the size of your annuity check every month,which option should you choose?

If you have a defined-benefit retirement plan,you're considered an "inactive participant."

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

Individual retirement accounts (IRAs)are personal savings accounts that give you tax advantages for saving for retirement.

Since the 2000s,the average personal savings rate in the U.S.has decreased.

Because inflation makes goods and services cost more over time,one would be wise to always plan for inflation when planning one's retirement.

Relate the pros and cons of defined-benefit plans.

Of the tax-favored retirement plans for the self-employed and small business employee,one is limited to $54,000 of annual contributions per person.It is the ________ plan.

Most employees in the United States today are covered by an employer funded defined-benefit plan.

A ________ is defined by the fact that your employer provides all the funds for the retirement plan,without any contribution from you.

Why have many companies switched from traditional defined-benefits plans to cash-balance plans?

The only difference between a defined-benefit plan and a defined-contribution retirement plan is the tax deduction for the defined-contribution plan.

Elaborate on the basics of annuities and payouts.

Social Security is a plan where current workers' contributions pay for current retiree's benefits.

What advantage does the Roth IRA have over the traditional IRA?

One of the advantages to a traditional IRA is that it allows you to make a penalty-free withdrawal to purchase your first home.

How is the size of a person's Social Security retirement benefits determined?

Which of the following benefits is not provided by Social Security?

What are some very important things to monitor concerning your retirement plan,both before and after retirement?

You and your spouse both have good retirement plans through work and you both receive good Social Security checks based on your own incomes.If your goal is to maximize the size of your annuity check every month,which option should you choose?

If you have a defined-benefit retirement plan,you're considered an "inactive participant."

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