Question 1

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-Inflation will have [little | great] impact on your retirement plans.

Accepted Answer

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

Question 2

An investor's principal source of retirement income is social security retirement funds.

Accepted Answer

A) True 
 B)False

Question 3

You would most likely purchase an annuity from a bank.

Accepted Answer

A) True 
 B)False

Question 4

Danielle puts 8 percent of her paycheck in a 401(k)plan administered by her employer.Danielle earns $55,000 per year and is in the 28 percent tax category.What annual tax savings does she get from her contribution? If her employer matches contributions on the first 5% of her salary dollar for dollar and the second 5% 50 cents on the dollar,how much will her employer put into her account this year?

Accepted Answer

The answer of Danielle puts 8 percent of her paycheck...

Question 5

Employers who want flexibility in how much they contribute to their employees' retirement plans would want to consider adopting a ____ plan.

Accepted Answer

A)  Qualified defined contribution 
B)  Cash balance 
C)  Defined benefit 
D)  Profit sharing 
E)  403(b)

Question 6

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-Under a defined contribution pension plan,an employee [is | is not] able to estimate what his pension payment would be upon retirement.

Accepted Answer

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

Question 7

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-It usually makes less sense to convert a traditional IRA to a Roth IRA the [younger |older] you are.

Accepted Answer

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

Question 8

The two most common sources of retirement income for most people are social security and pensions.

Accepted Answer

A) True 
 B)False

Question 9

The SEP is designed for self-employed individuals.

Accepted Answer

A) True 
 B)False

Question 10

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-The major source of retirement income for current retirees is [Social Security | personal savings].

Accepted Answer

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

Question 11

It really makes little difference whether you start retirement savings at age 25 or at age 45.

Accepted Answer

A) True 
 B)False

Question 12

Mary Ann contributed $5,000 to her 401(k)plan.If Mary Ann is in the 15% marginal tax bracket,this retirement contribution saved her approximately ____ in federal income taxes.

Accepted Answer

A)  $5,000 
B)  $4,250 
C)  $2,500 
D)  $ 750 
E)  $ 0

Question 13

Eric works for a company with a defined contribution benefit pension plan.He will retire in ten years (at age 65)and expects his salary to be $100,000 in his last year of work.Social security should pay him $1,325 per month at that time.If he needs 80 percent of his income to maintain his standard of living upon retirement,how much annual income will he need from his employer's plan and from his own planning when he retires?

Accepted Answer

The answer of Eric works for a company with a...

Question 14

Social Security is sufficient to enable a worker and spouse to maintain their pretirement standard of living.

Accepted Answer

A) True 
 B)False

Question 15

The fees on annuities tend to be high compared to mutual funds.

Accepted Answer

A) True 
 B)False

Question 16

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-The initial estimates of retirement expenses and income should be done in [today's | future] dollars.

Accepted Answer

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

Question 17

A 401(k)plan allows you to defer taxes on part of your income.

Accepted Answer

A) True 
 B)False

Question 18

The employer retirement plan that is intended to promote employee productivity and allows the employer to vary the amount of annual contributions is a

Accepted Answer

A)  Qualified defined contribution plan. 
B)  Thrift and savings plan. 
C)  Profit sharing plan. 
D)  401(k)plan. 
E)  403(b)plan.

Question 19

Dr.Johnson is surgeon at University Hospital.She will pay ____ taxes on all of her $170,000 salary.

Accepted Answer

A)  Social Security 
B)  Medicare 
C)  Medicaid 
D)  a and b 
E)  a,b,and c

Question 20

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-For most people,participation in the social security system is [voluntary | mandatory].

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

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -Inflation will have [little | great] impact on your retirement plans.

An investor's principal source of retirement income is social security retirement funds.

You would most likely purchase an annuity from a bank.

Employers who want flexibility in how much they contribute to their employees' retirement plans would want to consider adopting a ____ plan.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -Under a defined contribution pension plan,an employee [is | is not] able to estimate what his pension payment would be upon retirement.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -It usually makes less sense to convert a traditional IRA to a Roth IRA the [younger |older] you are.

The two most common sources of retirement income for most people are social security and pensions.

The SEP is designed for self-employed individuals.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -The major source of retirement income for current retirees is [Social Security | personal savings].

It really makes little difference whether you start retirement savings at age 25 or at age 45.

Mary Ann contributed $5,000 to her 401(k) plan.If Mary Ann is in the 15% marginal tax bracket,this retirement contribution saved her approximately ____ in federal income taxes.

Social Security is sufficient to enable a worker and spouse to maintain their pretirement standard of living.

The fees on annuities tend to be high compared to mutual funds.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -The initial estimates of retirement expenses and income should be done in [today's | future] dollars.

A 401(k)plan allows you to defer taxes on part of your income.

The employer retirement plan that is intended to promote employee productivity and allows the employer to vary the amount of annual contributions is a

Dr.Johnson is surgeon at University Hospital.She will pay ____ taxes on all of her $170,000 salary.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -For most people,participation in the social security system is [voluntary | mandatory].