Question 1

Rebecca Murphy is planning for her retirement. She has done some checking and thinks she will get about $1,025 a month from Social Security. She also thinks her pension plan will pay her about $1,125 per month. In addition, she has some personal retirement accounts that she thinks will pay her $500 per month. What step in the retirement planning process is Rebecca completing?

Accepted Answer

A)  Analyzing her current assets and liabilities 
B)  Estimating her spending needs 
C)  Evaluating her planned retirement income 
D)  Evaluating her retirement housing 
E)  Developing a balanced budget based on her retirement income

Question 2

In respect to your federal income taxes, which one of the following may you have to do during retirement, even if you did not have to do so prior to retiring? (Assume you have both pre- and post-retirement income.)

Accepted Answer

A)  Report your dividend and interest income 
B)  File an annual tax return no later than April 15 
C)  File semi-annual tax returns in April and October 
D)  File quarterly estimated tax returns 
E)  File semi-annual reports listing all of your income sources

Question 3

Most people can qualify for reduced Social Security retirement benefits at age 62.

Accepted Answer

A) True 
 B)False

Question 4

Which one of the following is a disadvantage associated with Social Security retirement income?

Accepted Answer

A)  Earned income partially offsets benefits 
B)  Forced savings 
C)  Portable from job to job 
D)  Cost shared with employer 
E)  Inflation-adjusted survivorship rights

Question 5

Why is it important to review your assets and liabilities before your retirement?

Accepted Answer

The answer of Why is it important to review your...

Question 6

Your first step in retirement planning is to:

Accepted Answer

A)  estimate your spending needs. 
B)  analyze your current assets and liabilities. 
C)  adjust your spending needs for inflation. 
D)  evaluate your planned retirement income. 
E)  determine if you'll have to work during retirement.

Question 7

What type of annuity is generally purchased by people of retirement age?

Accepted Answer

A)  Deferred annuity 
B)  Immediate annuity 
C)  Single-premium deferred annuity 
D)  Flexible-premium deferred annuity 
E)  Keogh annuity

Question 8

As its retirement plan contribution, Aaron Copeland's employer has been buying shares of the company's stock for Aaron's benefit. What type of retirement plan does Aaron most likely have?

Accepted Answer

A)  Money-purchase pension plan 
B)  Stock bonus plan 
C)  Profit-sharing plan 
D)  Salary reduction plan 
E)  403(b) plan

Question 9

What types of expenses can be lowered or eliminated during retirement?

Accepted Answer

The answer of What types of expenses can be lowered...

Question 10

Which is correct with respect to life expectancy?

Accepted Answer

A)  Men have a long life expectancy than women at any age. 
B)  There is no difference in life expectancy between men and women. 
C)  Women have a longer life expectancy than men. 
D)  There is no difference in life expectancy among racial groups in the U.S. 
E)  None of these statements is correct.

Question 11

Your work-related expenses, such as driving back and forth to work, will be lower or eliminated during retirement.

Accepted Answer

A) True 
 B)False

Question 12

Which one of the following is the most widely used source of retirement income?

Accepted Answer

A)  IRAs 
B)  Keogh plans 
C)  Social Security 
D)  Company pension plans 
E)  Union pension plans

Question 13

You can borrow from your Roth IRA.

Accepted Answer

A) True 
 B)False

Question 14

The potential loss of buying power during inflation is what makes it so important to plan ahead for your retirement.

Accepted Answer

A) True 
 B)False

Question 15

A successful, happy retirement just doesn't happen; you have to plan for it.

Accepted Answer

A) True 
 B)False

Question 16

During a divorce, pension benefits are generally divided between the spouses primarily based on the:

Accepted Answer

A)  length of the divorce period. 
B)  life expectancies of each spouse. 
C)  length of the marriage. 
D)  current age of each spouse. 
E)  living arrangements for the couple's children.

Question 17

If your employer is a tax-exempt institution such as a hospital, university, or museum, the salary reduction plan is called a Section 403(b) plan.

Accepted Answer

A) True 
 B)False

Question 18

Which type of annuity gives more income per dollar of outlay than any other type?

Accepted Answer

A)  Installment refund annuity 
B)  Life annuity with installment certain 
C)  Straight life annuity 
D)  Keogh annuity 
E)  Life with period certain annuity

Question 19

Your expenses for leisure activities will probably decrease during retirement.

Accepted Answer

A) True 
 B)False

Question 20

You can determine your net worth by:

Accepted Answer

A)  subtracting your assets from your liabilities. 
B)  subtracting the value of your home from the mortgage balance. 
C)  adding your liabilities and assets. 
D)  subtracting your liabilities from your assets. 
E)  adding the value of your home to that of your other assets.

Exam 18: Starting Early: Retirement Planning

In respect to your federal income taxes, which one of the following may you have to do during retirement, even if you did not have to do so prior to retiring? (Assume you have both pre- and post-retirement income.)

Most people can qualify for reduced Social Security retirement benefits at age 62.

Which one of the following is a disadvantage associated with Social Security retirement income?

Why is it important to review your assets and liabilities before your retirement?

Your first step in retirement planning is to:

What type of annuity is generally purchased by people of retirement age?

As its retirement plan contribution, Aaron Copeland's employer has been buying shares of the company's stock for Aaron's benefit. What type of retirement plan does Aaron most likely have?

What types of expenses can be lowered or eliminated during retirement?

Which is correct with respect to life expectancy?

Your work-related expenses, such as driving back and forth to work, will be lower or eliminated during retirement.

Which one of the following is the most widely used source of retirement income?

You can borrow from your Roth IRA.

The potential loss of buying power during inflation is what makes it so important to plan ahead for your retirement.

A successful, happy retirement just doesn't happen; you have to plan for it.

During a divorce, pension benefits are generally divided between the spouses primarily based on the:

If your employer is a tax-exempt institution such as a hospital, university, or museum, the salary reduction plan is called a Section 403(b) plan.

Which type of annuity gives more income per dollar of outlay than any other type?

Your expenses for leisure activities will probably decrease during retirement.

You can determine your net worth by: