Question 1

If your marginal tax rate while working is low, but you expect your marginal income tax rate to be high after you retire, you may be better off investing in a traditional IRA than in a Roth IRA.

Accepted Answer

A) True 
 B)False

Question 2

Bill is self-employed and has established a SEP retirement plan. Bill's net income for 2015 2018 is $74,500. How much can Bill contribute to the SEP?

Accepted Answer

A)   $40,000
B)   $17,000
C)   $18,625
D)   $11,500

Question 3

Many employers have eliminated defined-benefit retirement plans for employees because

Accepted Answer

A)   the employees did not appreciate the benefit.
B)   the employees were reluctant to contribute to the plans.
C)   the cost to the employer and long-term liability became overwhelming.
D)   All of the above are correct.

Question 4

Use the following two columns of items to answer the matching questions below:
-surrender charge
A)a financial contract that provides annual payments over a specified period
B)a fee imposed on money withdrawn from an annuity

Accepted Answer

The answer of Use the following two columns of items...

Question 5

If your retirement plan has no vesting requirement then it is not a

Accepted Answer

A)   defined-benefit plan.
B)   Roth IRA.
C)   traditional IRA.
D)   Keogh plan.

Question 6

Which of the following is not a characteristic of employer-sponsored retirement plans?

Accepted Answer

A)   They help you save for retirement.
B)   There are generally two types of employer-sponsored retirement plans.
C)   They are part of a good benefits package.
D)   Employer-sponsored retirement plans are a good place from which to borrow.

Question 7

Which of the following statements about IRAs is not true?

Accepted Answer

A)   The annual contribution limit will increase gradually.
B)   A married couple can contribute twice as much as an individual.
C)   Individuals over age 50 are able to make larger contributions.
D)   Penalties for early withdrawal are being phased out.

Question 8

As you near retirement, you should

Accepted Answer

A)   reduce risk in your portfolio and move funds from risky investments to income generating investments.
B)   move all of your invested funds to risk-free corporate bonds.
C)   move all of your invested funds to tax-free municipal bonds.
D)   move a major portion of your invested funds to growth stocks since you will have to replace your income when you retire.

Question 9

Use the following two columns of items to answer the matching questions below:
-ESOP
A)a defined contribution plan for small firms (1-10 employees)
B)a defined contribution plan in which the employer contributes to employee retirement accounts based on a specified profit formula
C)a defined contribution plan that allows employees to contribute up to $18,500 per year in 2018 on a pre-tax basis
D)a retirement plan in which the employer contributes its own stock to the employee's retirement account

Accepted Answer

The answer of Use the following two columns of items...

Question 10

Which of the following statements with regard to SEP plans is not true?

Accepted Answer

A)   Self-employed individuals can contribute up to 25% of annual net income.
B)   They are also called Keogh plans.
C)   The maximum contribution in 2018 is $55,000.
D)   A SEP is a defined-contribution plan.

Question 11

A surrender charge

Accepted Answer

A)   is a fee paid when you begin taking payments from your annuity upon retirement.
B)   is the half you share with a spouse.
C)   is the penalty imposed if you withdraw money in the first 8 years.
D)   is none of these.

Question 12

Describe two types of annuities.

Accepted Answer

Fixed annuities provide a specified retu...

Question 13

Which of the following is not true of retirement plans for the self-employed?

Accepted Answer

A)   A Keogh plan is usually used by high income individuals.
B)   Under a SEP, a maximum contribution of $55,000 is allowed for 2018.
C)   Self-employed individuals can choose from several plans including SEP plans and one-participant 401(k)  plans.
D)   A one-participant 401(k)  plan is similar to 401(k)  plans for employees except that it allows larger contributions.

Question 14

With which of the following retirement plans will your withdrawals not be subject to taxes if you are over 59 1/2 and have had the account for at least five years?

Accepted Answer

A)   Rollover IRA
B)   Roth IRA
C)   Traditional IRA
D)   Keogh plan

Question 15

In an employer-sponsored retirement plan, you should contribute at least

Accepted Answer

A)   the amount the employer will match.
B)   3% of your gross income in middle age.
C)   1% of your net income in your early working years.
D)   15% of your income in the last few working years.

Question 16

Social Security replaces approximately ________% of a worker's average annual income from his or her working years.

Accepted Answer

A)   100
B)   40
C)   75
D)   85

Question 17

Assuming Social Security income is not absolutely necessary at age 62, the decision whether to begin receiving reduced payments at age 62 versus waiting for full retirement age is

Accepted Answer

A)   a financial analysis decision based on present value and life expectancy.
B)   a moot point since the government tells you when you are eligible.
C)   a decision based on expected inflation rates.
D)   a moot point since you should take the money as soon as possible.

Question 18

You can elect to receive Social Security retirement benefits

Accepted Answer

A)   at the full retirement age, which is being raised from 65 to 69.
B)   at age 62 and take a reduced amount.
C)   and limit your ability to keep on working and earning income.
D)   and not be taxed on them, no matter how much other income you have.

Question 19

List three sources of income when you retire.

Accepted Answer

Social Security, IRAs, company pensions,...

Question 20

The Social Security system allows people to receive reduced benefits before their full retirement age.

Accepted Answer

A) True 
 B)False

Exam 19: Retirement Planning

A surrender charge

Correct Answer
verified

The Social Security system allows people to receive reduced benefits before their full retirement age.

Correct Answer
verified

List three sources of income when you retire.

Correct Answer
verified
Social Security, IRAs, company pensions,...
View Answer

If your marginal tax rate while working is low, but you expect your marginal income tax rate to be high after you retire, you may be better off investing in a traditional IRA than in a Roth IRA.

Correct Answer
verified

Use the following two columns of items to answer the matching questions below: -surrender charge A)a financial contract that provides annual payments over a specified period B)a fee imposed on money withdrawn from an annuity

Correct Answer
verified

In an employer-sponsored retirement plan, you should contribute at least

Correct Answer
verified

Which of the following statements about IRAs is not true?

Correct Answer
verified

Which of the following is not true of retirement plans for the self-employed?

Correct Answer
verified

If your retirement plan has no vesting requirement then it is not a

Correct Answer
verified

Bill is self-employed and has established a SEP retirement plan. Bill's net income for 2015 2018 is $74,500. How much can Bill contribute to the SEP?

Correct Answer
verified

Assuming Social Security income is not absolutely necessary at age 62, the decision whether to begin receiving reduced payments at age 62 versus waiting for full retirement age is

Correct Answer
verified

Which of the following is not a characteristic of employer-sponsored retirement plans?

Correct Answer
verified

Social Security replaces approximately ________% of a worker's average annual income from his or her working years.

Correct Answer
verified

Many employers have eliminated defined-benefit retirement plans for employees because

Correct Answer
verified

Correct Answer
verified

As you near retirement, you should

Correct Answer
verified

Which of the following statements with regard to SEP plans is not true?

Correct Answer
verified

With which of the following retirement plans will your withdrawals not be subject to taxes if you are over 59 1/2 and have had the account for at least five years?

Correct Answer
verified

You can elect to receive Social Security retirement benefits

Correct Answer
verified

Describe two types of annuities.

Correct Answer
verified
Fixed annuities provide a specified retu...
View Answer

Exam 19: Retirement Planning

A surrender charge

Correct AnswerverifiedShow Answer

The Social Security system allows people to receive reduced benefits before their full retirement age.

Correct AnswerverifiedShow Answer

List three sources of income when you retire.

Correct AnswerverifiedSocial Security, IRAs, company pensions,...View AnswerShow Answer

If your marginal tax rate while working is low, but you expect your marginal income tax rate to be high after you retire, you may be better off investing in a traditional IRA than in a Roth IRA.

Correct AnswerverifiedShow Answer

Use the following two columns of items to answer the matching questions below: -surrender charge A)a financial contract that provides annual payments over a specified period B)a fee imposed on money withdrawn from an annuity

Correct AnswerverifiedShow Answer

In an employer-sponsored retirement plan, you should contribute at least

Correct AnswerverifiedShow Answer

Which of the following statements about IRAs is not true?

Correct AnswerverifiedShow Answer

Which of the following is not true of retirement plans for the self-employed?

Correct AnswerverifiedShow Answer

If your retirement plan has no vesting requirement then it is not a

Correct AnswerverifiedShow Answer

Bill is self-employed and has established a SEP retirement plan. Bill's net income for 2015 2018 is $74,500. How much can Bill contribute to the SEP?

Correct AnswerverifiedShow Answer

Assuming Social Security income is not absolutely necessary at age 62, the decision whether to begin receiving reduced payments at age 62 versus waiting for full retirement age is

Correct AnswerverifiedShow Answer

Which of the following is not a characteristic of employer-sponsored retirement plans?

Correct AnswerverifiedShow Answer

Social Security replaces approximately ________% of a worker's average annual income from his or her working years.

Correct AnswerverifiedShow Answer

Many employers have eliminated defined-benefit retirement plans for employees because

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

As you near retirement, you should

Correct AnswerverifiedShow Answer

Which of the following statements with regard to SEP plans is not true?

Correct AnswerverifiedShow Answer

With which of the following retirement plans will your withdrawals not be subject to taxes if you are over 59 1/2 and have had the account for at least five years?

Correct AnswerverifiedShow Answer

You can elect to receive Social Security retirement benefits

Correct AnswerverifiedShow Answer

Describe two types of annuities.

Correct AnswerverifiedFixed annuities provide a specified retu...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Social Security, IRAs, company pensions,...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Fixed annuities provide a specified retu...
View Answer