Question 1

The exact amount of money you will need in retirement can be predicted accurately.

Accepted Answer

A) True 
 B)False

Question 2

Which employer retirement plan specifies the benefits promised to the employee at the normal retirement age?

Accepted Answer

A)   Defined-contribution plan
B)   SEP IRA
C)   401(k) 
D)   Roth IRA
E)   Defined-benefit planF) C) and D)
G) A) and B)

Question 3

Because of longer life expectancies, the full retirement age is greater than age 65 for younger individuals.

Accepted Answer

A) True 
 B)False

Question 4

An annuity is a contract from an insurance company that can provide an income for life.

Accepted Answer

A) True 
 B)False

Question 5

Profit-sharing plans or 401(k) plans are examples of defined-contribution plans.

Accepted Answer

A) True 
 B)False

Question 6

The two most popular personal retirement plans are individual retirement accounts (IRAs) and Keogh accounts.

Accepted Answer

A) True 
 B)False

Question 7

The people who are in the best position to save are:

Accepted Answer

A)   teenagers.
B)   young adults in their 20s.
C)   people in their 30s.
D)   middle-aged.
E)   elderly.F) D) and E)
G) A) and E)

Question 8

In a marriage that lasts more than 15 years, there's generally a ____________ split of the marital assets.

Accepted Answer

A)   10-90
B)   30-70
C)   40-60
D)   50-50
E)   60-40F) A) and E)
G) C) and D)

Question 9

How can retirees avoid housing traps?

Accepted Answer

Retirees can avoid housing traps by writ...

Question 10

Which of the following is a feature of an Education IRA (or Coverdell Education Savings Account) ?

Accepted Answer

A)   Tax-deferred interest and earnings
B)   10% early withdrawal penalty waiver when money is used for higher-education
C)   Annual limit on individual contributions
D)   Non-deductible contributions
E)   All of these are features of an Education IRA.F) A) and D)
G) A) and C)

Question 11

What are the key steps in retirement planning?

Accepted Answer

The first step is to analyze your assets...

Question 12

Up to 85 percent of your Social Security benefits may be subject to federal income tax.

Accepted Answer

A) True 
 B)False

Question 13

During retirement, you should increase your premium payments by increasing the face value of your life insurance.

Accepted Answer

A) True 
 B)False

Question 14

You can only buy an annuity by making periodic payments.

Accepted Answer

A) True 
 B)False

Question 15

During retirement, as long as you do not earn more than the annually exempt amount, your Social Security payments will not be affected.

Accepted Answer

A) True 
 B)False

Question 16

Which one of the following expenditures for retirees is most likely to decrease?

Accepted Answer

A)   Clothing expenses
B)   Insurance expenses
C)   Medical expenses
D)   Expenses for leisure activities
E)   Housing expensesF) A) and E)
G) B) and E)

Question 17

Why is financial planning for retirement vitally important?

Accepted Answer

A)   You can expect to live in retirement for many years.
B)   Social Security and your private pension may be insufficient to cover the cost of living.
C)   Inflation may diminish the purchasing power of your retirement savings.
D)   Knowing that you are financially prepared for retirement gives you peace of mind.
E)   All of the listed factors are vitally important.F) C) and D)
G) None of the above

Question 18

The contribution Billy Freniere's employer makes to his retirement plan depends on the profits of the company. What type of retirement plan does Billy have?

Accepted Answer

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

Question 19

Which statement is most likely correct about retirement planning?

Accepted Answer

A)   Social Security will cover most of your expenses.
B)   Your employer's pension combined with your Social Security will cover your retirement expenses.
C)   Most retirees don't need to worry about inflation.
D)   Your pension may remain constant even in an inflationary environment.
E)   Your living costs will remain constant once you retire.F) B) and C)
G) A) and E)

Question 20

Social Security benefits do not increase even if the cost of living increased during the preceding year.

Accepted Answer

A) True 
 B)False

Exam 18: Starting Early: Retirement Planning

Which of the following is a feature of an Education IRA (or Coverdell Education Savings Account) ?

Correct AnswerverifiedShow Answer

The people who are in the best position to save are:

Correct AnswerverifiedShow Answer

The exact amount of money you will need in retirement can be predicted accurately.

Correct AnswerverifiedShow Answer

During retirement, you should increase your premium payments by increasing the face value of your life insurance.

Correct AnswerverifiedShow Answer

The two most popular personal retirement plans are individual retirement accounts (IRAs) and Keogh accounts.

Correct AnswerverifiedShow Answer

You can only buy an annuity by making periodic payments.

Correct AnswerverifiedShow Answer

The contribution Billy Freniere's employer makes to his retirement plan depends on the profits of the company. What type of retirement plan does Billy have?

Correct AnswerverifiedShow Answer

An annuity is a contract from an insurance company that can provide an income for life.

Correct AnswerverifiedShow Answer

Which employer retirement plan specifies the benefits promised to the employee at the normal retirement age?

Correct AnswerverifiedShow Answer

How can retirees avoid housing traps?

Correct AnswerverifiedRetirees can avoid housing traps by writ...View AnswerShow Answer

Because of longer life expectancies, the full retirement age is greater than age 65 for younger individuals.

Correct AnswerverifiedShow Answer

Which one of the following expenditures for retirees is most likely to decrease?

Correct AnswerverifiedShow Answer

In a marriage that lasts more than 15 years, there's generally a ____________ split of the marital assets.

Correct AnswerverifiedShow Answer

Why is financial planning for retirement vitally important?

Correct AnswerverifiedShow Answer

Profit-sharing plans or 401(k) plans are examples of defined-contribution plans.

Correct AnswerverifiedShow Answer

Which statement is most likely correct about retirement planning?

Correct AnswerverifiedShow Answer

Up to 85 percent of your Social Security benefits may be subject to federal income tax.

Correct AnswerverifiedShow Answer

During retirement, as long as you do not earn more than the annually exempt amount, your Social Security payments will not be affected.

Correct AnswerverifiedShow Answer

What are the key steps in retirement planning?

Correct AnswerverifiedThe first step is to analyze your assets...View AnswerShow Answer

Social Security benefits do not increase even if the cost of living increased during the preceding year.

Correct AnswerverifiedShow Answer

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Retirees can avoid housing traps by writ...
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Correct Answer
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Correct Answer
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The first step is to analyze your assets...
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Correct Answer
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