Exam 10: Planning for Retirement

Marianne opened a retirement account that has an annual yield of 5.5%.She is planning to retire in 25 years.How much should she put into the account each month so that she will have $500,000 when she retires?

Maria's employer of 19 years offers a pension plan that is the product of the three -year average of her most current salaries,the number of years of service,and a 2% multiplier.Her last three salaries are: $63,500,$65,000,and $66,500.What is her annual pension benefit?

Tyrone has an annual salary of $48,000.His employer offers a 401k plan;the company matches 25% of Tyrone's 401k contributions up to 5% of his salary.The maximum allowable contribution to any 401k is $16,500.To maximize his employer's contribution,Tyrone should deposit $200 a month into his account and his employer will deposit $50.

An insurance company uses the mortality table below to calculate its risk when writing life insurance policies. ​ If this company insures 12,000 54-year -old men,how many are expected to die before they reach their 55th birthday?

Jack's full Social Security retirement benefit is $1,890.He started collecting Social Security benefits at age 65,so his benefits are reduced by about 13.3%.What will his monthly benefit be?

Constance arranged for a universal life insurance policy with a face value of $450,000,when she was married.The current cash value of the policy is $12,132.Her premium is $1,500 per year.She wants to buy a new car and is looking for items in her budget that can be put towards the car payment.How many years and months could she suspend her premium payment so that the cash value could be used to pay the premium?

Where does the money come from to pay Social Security benefits today to those who are receiving them? Why is this a concern for the baby boomer generation?

It is advisable to lock in a term life insurance policy rate at a young age because the cost of life insurance increases as a person ages.

Mr.Watkins,born in 1956,is almost 61 years old and is hoping to retire at the age of 62.Over his life,he earned an average of $75,000 per year after adjusting for inflation.The formula for calculating monthly Social Security benefits is 90% of the first $856 earned each month,plus 32% of the monthly earnings over $856 but less than or equal to $5,157 plus 10% of the monthly earning over $5,157.Mr.Watkins has been informed that his full retirement benefit will be reduced by 5/9% for every month he retires before the age of 66 years and 4 months.What will Mr.Watkins' monthly benefit be?

Caleb's annual salary is $45,000 per year.His employer matches 75% of his 401k contributions up to 10% of his annual salary.Caleb contributes $250 from each biweekly paycheck to his 401k account.What is the combined total of his annual contribution and his employer's contribution?

An insurance company uses the mortality table below to calculate its risk when writing life insurance policies. ​ Based on the table,what is the probability as a percent that a 63-year -old woman will live to see her 64th birthday? ​

The probability that a 42-year -old man will die before his 43rd birthday is about 0.29%.If an insurance company insures 30,000 42-year -old men,how many are expected to die before their 43rd birthdays?

Carolyn has been contributing $350 per month to a pre-tax retirement account since she graduated college at the age of 22.This account has been earning 7% compounded monthly.When she is 48,her youngest child is ready to start college,and Carolyn wants to withdraw 20% of the money in the account for tuition.Carolyn's tax bracket this year is 25%,and she knows she will have to pay a 10% early withdrawal penalty.How much money will she realize to pay for her child's tuition?

Don opened a retirement account with an APR of 3.25% compounded monthly.He is planning to retire in 15 years.About how much will he have in the account when he retires if he deposits $750 a month?

A COLA is based on the Consumer Price Index.

Nancy bought a 20-year term life insurance policy with a face value of $200,000.Her monthly premium is $66.She dies after 2 years.Her beneficiaries will receive $200,000 ÷ 2 or $100,000.

A Roth IRA is tax-deferred,so taxes are deferred until the money is withdrawn from the account.

Last year,Mrs.Washington had a taxable income of $48,000 and paid about 20% in taxes.This year she contributed $3,000 to a traditional IRA.About how much could her tax liability be reduced?

The mortality rate for a certain male category is 0.005657.This means there is a 56% chance of a 50-year old man dying before his next birthday.

Mrs.Chambers is 62 years old and plans to retire.Over her life she earned an average of $2,500 per month after adjusting for inflation.The formula for calculating the full monthly Social Security benefits is 90% of the first $856 earned,then 32% of the earnings over $856.What will her monthly benefit be if her full retirement benefit is reduced by approximately 30% for retiring before the age of 67?