Question 1

Vesting requirements apply to both employer and employee contributions into a retirement plan.

Accepted Answer

A) True 
 B)False

Question 2

Because each individual employee makes his or her own investment decisions,a salary-reduction plan could be described as a self-directed retirement plan.

Accepted Answer

A) True 
 B)False

Question 3

Performing a large number of calculations on the possible returns from a mix of combinations of investments in an overall portfolio is called

Accepted Answer

A) Monte Carlo analysis. 
B) leverage. 
C) Black Jack strategy. 
D) asset allocation.

Question 4

If the Social Security tax rate is 7.65 percent (6.2% FICA plus 1.45% Medicare) and the maximum taxable yearly earnings is $117,000,how much Social Security tax would be paid by an employee earning $127,000?

Accepted Answer

A) $8,950.50 
B) $9,095.50 
C) $9,715.50 
D) $18,910

Question 5

An irrevocable trust cannot be changed or undone by the grantor during his or her lifetime.

Accepted Answer

A) True 
 B)False

Question 6

Persons who are either fully insured or currently insured are eligible to receive Social Security retirement benefits.

Accepted Answer

A) True 
 B)False

Question 7

At a minimum you should contribute enough into your retirement account to receive the maximum

Accepted Answer

A) employer matching contribution. 
B) tax write-off. 
C) take-home pay. 
D) earned income credit.

Question 8

Which of the following is most likely to have to go through probate?

Accepted Answer

A) Ownership of a vehicle 
B) A retirement account 
C) A joint bank account 
D) A home owned by a married couple

Question 9

An employer-sponsored retirement plan in which the employer or the employee puts money in a retirement account for the employee,and the amount of the retirement benefit depends on how well the investment yields,is called a

Accepted Answer

A) defined-contribution plan. 
B) defined-benefit plan. 
C) tax-sheltered annuity. 
D) profit-sharing plan.

Question 10

Which tax is assessed by the federal government against the estate of deceased person before it is passed to heirs?

Accepted Answer

A) Estate tax 
B) Inheritance tax 
C) Excise tax 
D) Flat tax

Question 11

Which of the following is designed for employees of large,private profit-seeking corporations?

Accepted Answer

A) 401(k) plan. 
B) 403(b) plan. 
C) 457 plan. 
D) SIMPLE IRA.

Question 12

Translating your current required annual retirement savings amount into a percentage of total income and then investing that same percentage throughout your working life will help you build a retirement savings fund that keeps up with Social Security.

Accepted Answer

A) inflation. 
B) taxes. 
C) recessions. 
D) Social Security.

Question 13

If one has no legal heirs,the state receives one's estate.

Accepted Answer

A) True 
 B)False

Question 14

Through the Social Security system,current workers support current retirees.

Accepted Answer

A) True 
 B)False

Question 15

To collect Social Security retirement benefits based on a spouse's earnings,

Accepted Answer

A) the marriage must have lasted at least ten years. 
B) neither can have remarried. 
C) both must be at least 62 years old. 
D) (All of these.)

Question 16

An annuity is a good choice as an investment option within an IRA or inside your employer's 401(k) plan as you save for retirement.

Accepted Answer

A) True 
 B)False

Question 17

To avoid income tax withholding on funds being transferred into a rollover IRA,the payment must be made directly to the employee.

Accepted Answer

A) True 
 B)False

Question 18

A direct trustee-to-trustee rollover will avoid the IRS's 20 percent withholding on retirement rollover.

Accepted Answer

A) True 
 B)False

Question 19

Many employers encourage their workers to participate in the company's retirement plan by offering a _________ equal to all or a portion of the amount the employee contributes into the plan.

Accepted Answer

A) tax-deduction 
B) raise 
C) bonus 
D) matching contribution

Question 20

Experts estimate that retirees need approximately 50 percent of their preretirement income to live comfortably.

Accepted Answer

A) True 
 B)False

Exam 17: Retirement and Estate Planning

Vesting requirements apply to both employer and employee contributions into a retirement plan.

Because each individual employee makes his or her own investment decisions,a salary-reduction plan could be described as a self-directed retirement plan.

Performing a large number of calculations on the possible returns from a mix of combinations of investments in an overall portfolio is called

If the Social Security tax rate is 7.65 percent (6.2% FICA plus 1.45% Medicare) and the maximum taxable yearly earnings is $117,000,how much Social Security tax would be paid by an employee earning $127,000?

An irrevocable trust cannot be changed or undone by the grantor during his or her lifetime.

Persons who are either fully insured or currently insured are eligible to receive Social Security retirement benefits.

At a minimum you should contribute enough into your retirement account to receive the maximum

Which of the following is most likely to have to go through probate?

An employer-sponsored retirement plan in which the employer or the employee puts money in a retirement account for the employee,and the amount of the retirement benefit depends on how well the investment yields,is called a

Which tax is assessed by the federal government against the estate of deceased person before it is passed to heirs?

Which of the following is designed for employees of large,private profit-seeking corporations?

Translating your current required annual retirement savings amount into a percentage of total income and then investing that same percentage throughout your working life will help you build a retirement savings fund that keeps up with Social Security.

If one has no legal heirs,the state receives one's estate.

Through the Social Security system,current workers support current retirees.

To collect Social Security retirement benefits based on a spouse's earnings,

An annuity is a good choice as an investment option within an IRA or inside your employer's 401(k) plan as you save for retirement.

To avoid income tax withholding on funds being transferred into a rollover IRA,the payment must be made directly to the employee.

A direct trustee-to-trustee rollover will avoid the IRS's 20 percent withholding on retirement rollover.

Many employers encourage their workers to participate in the company's retirement plan by offering a _________ equal to all or a portion of the amount the employee contributes into the plan.

Experts estimate that retirees need approximately 50 percent of their preretirement income to live comfortably.