Question 1

Sarah Logan is a professor at a public university. Her employer makes nontaxable contributions to a plan in her name and reduces her salary by the same amount. What type of retirement plan does Sarah have?

Accepted Answer

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

Question 2

To offset inflation, your retirement assets must earn enough to keep up with, and even exceed, the rate of inflation.

Accepted Answer

A) True 
 B)False

Question 3

If a marriage lasted more than 15 years, the marital assets are generally split 50-50 if the couple divorces.

Accepted Answer

A) True 
 B)False

Question 4

Generally, the current value of your jewelry is not included in your assets.

Accepted Answer

A) True 
 B)False

Question 5

Why is retirement planning important?

Accepted Answer

Retirement planning is important because...

Question 6

The amount of the minimum required distribution from a 401(k) at age 70½ is based on your life expectancy at the time of the distribution.

Accepted Answer

A) True 
 B)False

Question 7

Your first step in retirement planning is to analyze your current assets and liabilities.

Accepted Answer

A) True 
 B)False

Question 8

What happens to your Social Security income if you retire early?

Accepted Answer

A)   There is a temporary reduction of 5/9 of one percent for each month that you retire early.
B)   There is a permanent reduction of 5/9 of one percent for each month that you retire early.
C)   There is a temporary reduction of one percent for each year that you retire early.
D)   There is a permanent reduction of one percent for each year that you retire early.
E)   There is no impact on your Social Security income if you retire early.F) A) and D)
G) A) and C)

Question 9

What percent of Americans ages 65 to 74 are still in the workforce?

Accepted Answer

A)   20
B)   38
C)   41
D)   58
E)   67F) A) and B)
G) A) and E)

Question 10

Your Social Security benefits may be reduced if you earn above a certain amount a year, depending on your age and the amount you earn.

Accepted Answer

A) True 
 B)False

Question 11

All earnings in a tax-sheltered annuity grow without current federal taxation.

Accepted Answer

A) True 
 B)False

Question 12

It is vital to engage in basic retirement planning activities throughout your working years.

Accepted Answer

A) True 
 B)False

Question 13

Your federal income taxes will probably be lower during the retirement years.

Accepted Answer

A) True 
 B)False

Question 14

Possible sources of income for many retirees include:

Accepted Answer

A)   Social Security.
B)   other public pension plans.
C)   employer pension plans.
D)   personal retirement plans and annuities.
E)   All of these are possible sources of income for retirees.F) C) and D)
G) A) and B)

Question 15

Which of the following is a true statement about retirement planning?

Accepted Answer

A)   You can expect to spend about 16 to 30 years in retirement.
B)   It's never too early to begin planning for retirement.
C)   You should not let your 45th birthday roll by without a comprehensive retirement plan.
D)   Retirement planning has both emotional and financial components.
E)   All of these statements are true.F) D) and E)
G) A) and B)

Question 16

Over the last two decades, the defined-benefit plan has continued to grow rapidly while the number of defined-contribution plans has generally dropped.

Accepted Answer

A) True 
 B)False

Question 17

What types of expenses might increase during retirement?

Accepted Answer

Medical expenses and...

Question 18

If you are a government employee, you may have a Section 457 plan.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A)   Health care
B)   Federal income taxes
C)   Clothing expenses
D)   Work-related expenses
E)   State income taxesF) B) and C)
G) A) and E)

Question 20

The rate of return on annuities is rarely pegged to market rates.

Accepted Answer

A) True 
 B)False

Exam 18: Starting Early: Retirement Planning

Sarah Logan is a professor at a public university. Her employer makes nontaxable contributions to a plan in her name and reduces her salary by the same amount. What type of retirement plan does Sarah have?

Correct AnswerverifiedShow Answer

The rate of return on annuities is rarely pegged to market rates.

Correct AnswerverifiedShow Answer

Your first step in retirement planning is to analyze your current assets and liabilities.

Correct AnswerverifiedShow Answer

What happens to your Social Security income if you retire early?

Correct AnswerverifiedShow Answer

To offset inflation, your retirement assets must earn enough to keep up with, and even exceed, the rate of inflation.

Correct AnswerverifiedShow Answer

What types of expenses might increase during retirement?

Correct AnswerverifiedMedical expenses and...View AnswerShow Answer

All earnings in a tax-sheltered annuity grow without current federal taxation.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If you are a government employee, you may have a Section 457 plan.

Correct AnswerverifiedShow Answer

Generally, the current value of your jewelry is not included in your assets.

Correct AnswerverifiedShow Answer

Your Social Security benefits may be reduced if you earn above a certain amount a year, depending on your age and the amount you earn.

Correct AnswerverifiedShow Answer

The amount of the minimum required distribution from a 401(k) at age 70½ is based on your life expectancy at the time of the distribution.

Correct AnswerverifiedShow Answer

It is vital to engage in basic retirement planning activities throughout your working years.

Correct AnswerverifiedShow Answer

Why is retirement planning important?

Correct AnswerverifiedRetirement planning is important because...View AnswerShow Answer

What percent of Americans ages 65 to 74 are still in the workforce?

Correct AnswerverifiedShow Answer

Your federal income taxes will probably be lower during the retirement years.

Correct AnswerverifiedShow Answer

If a marriage lasted more than 15 years, the marital assets are generally split 50-50 if the couple divorces.

Correct AnswerverifiedShow Answer

Over the last two decades, the defined-benefit plan has continued to grow rapidly while the number of defined-contribution plans has generally dropped.

Correct AnswerverifiedShow Answer

Which of the following is a true statement about retirement planning?

Correct AnswerverifiedShow Answer

Possible sources of income for many retirees include:

Correct AnswerverifiedShow Answer

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Medical expenses and...
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Retirement planning is important because...
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