Question 1

It is almost certain that your pension benefits will increase to keep pace with inflation.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

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) A) and B)
G) None of the above

Question 4

In a reverse annuity mortgage,a lender uses your house as collateral to buy an annuity for you from a life insurance company.

Accepted Answer

A) True 
 B)False

Question 5

Because of their actuarial aspects,defined-benefit plans tend to be more-complicated and more expensive to administer than defined-contribution plans.

Accepted Answer

A) True 
 B)False

Question 6

Which retirement plan is specifically designed for self-employed individuals and their employees?

Accepted Answer

A)  Roth IRA
B)  traditional IRA
C)  defined-contribution plan
D)  Keogh plan
E)  defined-benefit planF) C) and D)
G) C) and E)

Question 7

When should you apply for Social Security?

Accepted Answer

A)  3 months before you retire
B)  1 year before you retire
C)  1 year after you retire
D)  10 years before you retire
E)  on the day you retireF) C) and D)
G) B) and C)

Question 8

Which one of the following is probably the best suggestion for stretching your retirement income?

Accepted Answer

A)  skip leisure activities
B)  cut your food expenditures
C)  cancel your life and property insurance
D)  use your skills and time instead of your money
E)  get rid of your health insuranceF) C) and E)
G) A) and E)

Question 9

Inflation increases the purchasing power of your retirement savings.

Accepted Answer

A) True 
 B)False

Question 10

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 B)
G) C) and E)

Question 11

If your employer is a tax-exempt institution such as a hospital,university,or museum,the salary reduction plan is called a Section 403(b)plan.

Accepted Answer

A) True 
 B)False

Question 12

Why is retirement planning important?

Accepted Answer

Retirement planning is important because...

Question 13

Which one of the following is not a private source of retirement income?

Accepted Answer

A)  traditional IRAs
B)  Social Security
C)  defined contribution plans
D)  defined benefit plans
E)  spousal IRAsF) A) and E)
G) A) and D)

Question 14

Your Social Security payments will start at age 65 whether you apply for benefits or not.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A)  I should wait until at least age 40 to start saving for retirement.
B)  My pension benefits will increase to keep pace with inflation.
C)  I should update my retirement plan periodically.
D)  My employer's health insurance plan will cover my medical expenses.
E)  Social Security will cover my medical expenses.F) C) and D)
G) All of the above

Question 16

Your work-related expenses,such as driving back and forth to work,will be lower or eliminated during retirement.

Accepted Answer

A) True 
 B)False

Question 17

Earned interest on annuities accumulates tax-free until the annuity payments begin.

Accepted Answer

A) True 
 B)False

Question 18

Under a 401(k)plan,you can elect to have your employer make nontaxable contributions to the plan for your benefit and reduce your salary by an offsetting amount.

Accepted Answer

A) True 
 B)False

Question 19

Jeremiah Brown has been making contributions into an individual retirement account for his retirement.His contributions are not tax deductible but his earnings accumulate tax free.What type of individual retirement account does he have?

Accepted Answer

A)  traditional IRA
B)  Roth IRA
C)  spousal IRA
D)  Education IRA
E)  401(k) F) B) and C)
G) A) and E)

Question 20

If you work after 65,your Social Security benefits will neither increase nor decrease.

Accepted Answer

A) True 
 B)False

Exam 18: Starting Early: Retirement Planning

Your work-related expenses,such as driving back and forth to work,will be lower or eliminated during retirement.

Correct AnswerverifiedShow Answer

Which retirement plan is specifically designed for self-employed individuals and their employees?

Correct AnswerverifiedShow Answer

It is almost certain that your pension benefits will increase to keep pace with inflation.

Correct AnswerverifiedShow Answer

Why is financial planning for retirement vitally important?

Correct AnswerverifiedShow Answer

Under a 401(k)plan,you can elect to have your employer make nontaxable contributions to the plan for your benefit and reduce your salary by an offsetting amount.

Correct AnswerverifiedShow Answer

Which one of the following is probably the best suggestion for stretching your retirement income?

Correct AnswerverifiedShow Answer

Jeremiah Brown has been making contributions into an individual retirement account for his retirement.His contributions are not tax deductible but his earnings accumulate tax free.What type of individual retirement account does he have?

Correct AnswerverifiedShow Answer

If you work after 65,your Social Security benefits will neither increase nor decrease.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When should you apply for Social Security?

Correct AnswerverifiedShow Answer

Which one of the following is not a private source of retirement income?

Correct AnswerverifiedShow Answer

Earned interest on annuities accumulates tax-free until the annuity payments begin.

Correct AnswerverifiedShow Answer

If your employer is a tax-exempt institution such as a hospital,university,or museum,the salary reduction plan is called a Section 403(b)plan.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Why is retirement planning important?

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

In a reverse annuity mortgage,a lender uses your house as collateral to buy an annuity for you from a life insurance company.

Correct AnswerverifiedShow Answer

Your Social Security payments will start at age 65 whether you apply for benefits or not.

Correct AnswerverifiedShow Answer

Because of their actuarial aspects,defined-benefit plans tend to be more-complicated and more expensive to administer than defined-contribution plans.

Correct AnswerverifiedShow Answer

Inflation increases the purchasing power of your retirement savings.

Correct AnswerverifiedShow Answer

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Retirement planning is important because...
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