Question 1

What is the amount of income tax withheld (by the plan sponsor or company) on an IRA or qualified plan?

Accepted Answer

A) 5% 
B) 10% 
C) 20% 
D) 25%

Question 2

Which of the following was created first in the history of retirement plans?

Accepted Answer

A) Social Security 
B) Traditional IRAs 
C) Pensions for Massachusetts residents who were wounded in battle 
D) The American Express Company's private pension plan

Question 3

What type of qualified plan must be "substantial and recurring" with non-discriminatory allocation of contributions?

Accepted Answer

A) Profit Sharing 
B) Money Purchase Plans 
C) Age-weighted 
D) 401 (k) Plans

Question 4

What are the phases of planning for retirement called?

Accepted Answer

A) Earning phase, saving phase, spending phase 
B) Earning phase and saving phase 
C) Saving phase, spending phase, and distribution phase 
D) Saving phase and distribution phase

Question 5

Marcus has 20 employees and wishes to start a qualified plan. Who can he exclude from plan participation?

Accepted Answer

A) Employees who work full-time for the last year. 
B) Employees who work full-time for the past five years. 
C) Employees who work full-time for the past three years. 
D) Employees who are under the age of 21.

Question 6

Which of the following is true regarding Medicaid?

Accepted Answer

A) Medicaid is a health insurance program specifically designed for retirees 
B) The laws enacting Medicaid were signed in 1985 
C) Medicaid is designed to be run at the state level 
D) The Affordable Care Act provided less federal funding to most states

Question 7

Mitch is a stay-at-home Dad with 8 year old twins. His wife just passed-away and he is not sure what to do with his financial situation. There are some savings from his wife's law firm and Mitch will receive monies from the firm as part owner. What should you inform Mitch of?

Accepted Answer

A) He has the right to apply for survivor benefits. 
B) There is a one-time death benefit of $255. 
C) He will receive benefits until the children are 18 years of age. 
D) All the above.

Question 8

What usually determines the best successor to a business?

Accepted Answer

A) Family ties 
B) Abilities and motivation 
C) The person to inherit money needed to run the business 
D) The wishes of the preceding owner

Question 9

Before you begin looking at other aspects of retirement analysis, what should you determine?

Accepted Answer

A) Rates of inflation 
B) Client's retirement goals 
C) Taxes 
D) Insurance needs

Question 10

When determining what plan is best for Jeff's business some tax considerations should be considered. When selecting asset class of different investments, what should be compared?

Accepted Answer

A) After-tax 
B) Before-tax 
C) Earned-tax 
D) Tax-deferred

Question 11

Mitch is happy to know there will be some funds coming in the house for his children after his wife passed-away after 11 years of marriage. But the monies are not really enough to maintain their standard of living. What should Mitch be informed of?

Accepted Answer

A) There is nothing he can do when it comes to benefits to help out. 
B) Mitch can receive up to 10 percent of the employee's benefits once the children move out. 
C) Mitch can receive a percentage of his wife's employee's benefits once he is 62 years old. 
D) That he is entitled to 50 percent of his wife's employee benefits as long as the children are under the age of 16 years.

Question 12

What types of account are protected by anti-alienation clause?

Accepted Answer

A) Savings Accounts 
B) Employee Benefit Accounts 
C) Corporate Accounts 
D) Retirement Accounts

Question 13

On a Federal level, what department oversees Medicaid?

Accepted Answer

A) CMS 
B) DFCS 
C) ACA 
D) SSA

Question 14

Mike owns a motorcycle shop and wants to add a benefit plan for his employees. He has heard about age-weighted plans and thinks this may be the best plan. What should Mike know about age-weighted plans?

Accepted Answer

A) They must be combined with a qualified retirement plan. 
B) They are exempt from non-discrimination testing. 
C) Employer contributions must be "substantial and recurring." 
D) These plans are tested under cross-testing rules.

Question 15

Under what circumstances are Medicare benefits not provided?

Accepted Answer

A) If an accident is the fault of the covered. 
B) If the covered is traveling outside of the United States. 
C) If the covered is hit by an uninsured individual. 
D) If the individual has never been covered by Medicare.

Question 16

What was the amount of aggregate IRA assets near the end of 2014?

Accepted Answer

A) $1.8 million 
B) $3.7 billion 
C) $7.3 trillion 
D) $8.9 trillion

Question 17

At what age can a taxpayer withdraw amounts from IRAs without incurring an early withdrawal penalty?

Accepted Answer

A) 50 ½ 
B) 59 ½ 
C) 65 
D) 70

Question 18

How does retirement planning rank among client goals addressed by financial planners?

Accepted Answer

A) Last 
B) Among the least common 
C) In the middle 
D) Among the most common

Question 19

Rick loves only half of his employees and hates the rest. He is considering offering a qualified retirement plan, but doesn't want to give it to the employees he hates. As his financial advisor, you remind him:

Accepted Answer

A) That employers are allowed an immediate tax deduction for amount contribute 
B) That the employees that he loves will love him back for not having to pay income taxes on the amount they contribute to their savings. 
C) Both A and B 
D) Neither A nor B

Question 20

How many days does Medicare cover at a skilled nursing facility?

Accepted Answer

A) First 100 days 
B) Last 100 days 
C) First 30 days 
D) Last 30 days

Exam 6: Retirement Savings and Income Planning