Exam 13: Basic Structure of Retirement Income

Susan Ebbing has been reading about the financial mess. She is convinced that by the time she retires in 15 years, social security will have become bankrupt. In developing her retirement plan, would you ignore social security completely?

All qualified plans must cover employees who have reached the age of ______ and completed _______ years of service. However, if a plan provides immediate vesting, only______ years of service are necessary.

Who is eligible for Medicare Part A?

Which of the following is true regarding the percent test, ratio test, and average benefits test?

Describe the basic types of benefits offered by social security.

What qualifications are necessary for becoming eligible for social security payments?

David Landmesser, a successful businessman, is 50 years old. His wife has been asking him to come to you for retirement planning. David is reluctant to do so because he is convinced that, over time, inflation will erode the value of the dollar, in which case the retirement plan will be rendered worthless. Can you convince him to let you develop a retirement plan?

How are social security benefits taxed?

An age-weighted profit-sharing plan

Describe the nature of a profit sharing plan.

Explain the funding requirements of a qualified plan.

Discuss the essential features of a 401(k) plan.

Discuss briefly the nature of money purchase pension plans?

The maximum contribution for a defined benefit plan is lesser than $210,000 2007, adjusted for inflation or

Defined benefit plans may include which of the following features?

What are the coverage requirements of a qualified plan?

Lynn Thompson has $300,000 in an IRA which is currently invested in a CD. The money was rolled over from another investment in April. It is October of the same year now and the CD is matured. Lynn is about to roll it over into a mutual fund. It is almost by accident that you have discovered this fact. What is your advice?

What are the vesting requirements of a qualified plan?

Are Medicare payments a part of social security benefits? How does Medicare work?

Your client is interested in making a contribution to a Roth IRA. Which of the following statements is not correct?