Question 1

Early withdrawal of funds from an annuity may result in IRS penalties and

Accepted Answer

A)  surrender fees. 
B)  bailout fees. 
C)  12(b)fees. 
D)  guarantee fees. 
E)  discontinuance insurance.

Question 2

Employees who have 401(k)plans also have to decide how to invest the funds in their plan.

Accepted Answer

A) True 
 B)False

Question 3

The major mistake(s)people make in retirement planning is(are)

Accepted Answer

A)  starting too late. 
B)  saving too little. 
C)  investing too conservatively. 
D)  a and b 
E)  a,b,and c

Question 4

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-The median household approaching retirement has less than [25 | 50] percent of the money needed to maintain their standard of living in retirement.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 5

Early death results in the loss of annuity capital in a straight life annuity.

Accepted Answer

A) True 
 B)False

Question 6

There are early withdrawal penalties for all of the following except

Accepted Answer

A)  Roth IRA contributions. 
B)  Traditional IRA contributions. 
C)  Annuity contributions. 
D)  SEP contributions. 
E)  401(k)contributions.

Question 7

The third step in retirement planning is to formulate an investment program.

Accepted Answer

A) True 
 B)False

Question 8

The period during which premiums are paid for the purchase of an annuity is called the

Accepted Answer

A)  installment period. 
B)  accumulation period. 
C)  survivor period. 
D)  distribution period. 
E)  contract period.

Question 9

The advantage of profit sharing plans that invest in their own company stock is that the minimum value of the stock is guaranteed.

Accepted Answer

A) True 
 B)False

Question 10

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-The first step in retirement planning is to [set retirement goals | decide how much money you cam afford to set aside for retirement].

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 11

Annuities are administered by

Accepted Answer

A)  banks. 
B)  brokerage houses. 
C)  insurance companies. 
D)  mutual fund companies. 
E)  All of the above

Question 12

The amount of money in your defined contribution retirement portfolio will depend on

Accepted Answer

A)  the age at which you begin contributing. 
B)  the amount of money you deposit each month. 
C)  the rate of return on your savings. 
D)  all of these. 
E)  none of these really make much difference.

Question 13

The portion of the principal and interest of an annuity that has not been paid to the annuitant prior to death is the ____ benefit.

Accepted Answer

A)  principal 
B)  distribution 
C)  survivorship 
D)  installment 
E)  accumulated

Question 14

Minimum distributions are not required from

Accepted Answer

A)  401(k)plans. 
B)  Traditional IRAs. 
C)  Roth IRAs. 
D)  SEP plans 
E)  Keogh plans.

Question 15

A Roth IRA

Accepted Answer

A)  is funded with after tax dollars. 
B)  allows interest or dividends to accrue tax free. 
C)  permits you to withdraw your contribution at any time. 
D)  provides for tax-free earnings if you hold the account 5 years and are 59at withdrawal. 
E)  all of the above are true.

Question 16

Marcia works for Telephonic Industries and participates in its thrift and savings plan.For every $1.00 Marcia contributes to the plan,up to 4 percent of her salary,the company contributes $0.50.Which of the following accurately describe this plan?

Accepted Answer

A)  It's a defined benefit plan. 
B)  It's a non-contributory plan. 
C)  It's a cash balance plan. 
D)  It's a matching plan. 
E)  It's a profit sharing plan

Question 17

If one is unsure about the facts needed to estimate retirement needs,it is better to do nothing for a few years.

Accepted Answer

A) True 
 B)False

Question 18

Traditional defined benefit plans are better suited than cash balance plans for a mobile workforce.

Accepted Answer

A) True 
 B)False

Question 19

A graded vesting schedule would legally have to give you some vesting rights even though you worked at a company only 1 year.

Accepted Answer

A) True 
 B)False

Question 20

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-You are age 45 and healthy,and you are withdrawing money from your IRA.There [will | will not] be a tax penalty for doing this.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Exam 14: Planning for Retirement

Early withdrawal of funds from an annuity may result in IRS penalties and

Employees who have 401(k)plans also have to decide how to invest the funds in their plan.

The major mistake(s) people make in retirement planning is(are)

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -The median household approaching retirement has less than [25 | 50] percent of the money needed to maintain their standard of living in retirement.

Early death results in the loss of annuity capital in a straight life annuity.

There are early withdrawal penalties for all of the following except

The third step in retirement planning is to formulate an investment program.

The period during which premiums are paid for the purchase of an annuity is called the

The advantage of profit sharing plans that invest in their own company stock is that the minimum value of the stock is guaranteed.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -The first step in retirement planning is to [set retirement goals | decide how much money you cam afford to set aside for retirement].

Annuities are administered by

The amount of money in your defined contribution retirement portfolio will depend on

The portion of the principal and interest of an annuity that has not been paid to the annuitant prior to death is the ____ benefit.

Minimum distributions are not required from

A Roth IRA

Marcia works for Telephonic Industries and participates in its thrift and savings plan.For every $1.00 Marcia contributes to the plan,up to 4 percent of her salary,the company contributes $0.50.Which of the following accurately describe this plan?

If one is unsure about the facts needed to estimate retirement needs,it is better to do nothing for a few years.

Traditional defined benefit plans are better suited than cash balance plans for a mobile workforce.

A graded vesting schedule would legally have to give you some vesting rights even though you worked at a company only 1 year.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -You are age 45 and healthy,and you are withdrawing money from your IRA.There [will | will not] be a tax penalty for doing this.