Deck 14: Retirement Planning

Question 1

Only saving now and curtailing current spending can ensure comfortable retirement later.

Answer 1

True

Question 2

During your retirement, your employer's health insurance plan and provincial health insurance will cover your medical expenses.

Answer 2

False

Question 3

In reviewing your assets for retirement, you should increase premium payments by increasing the face value of your life insurance.

Answer 3

False

Question 4

Be certain you don't let your 45^thbirthday roll by without a comprehensive retirement plan.

Question 5

You can expect to spend about 16 to 20 years in retirement.

Question 6

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

Question 7

Your net worth is equal to your assets minus liabilities.

Question 8

Your retirement will last only about 15 years.

Question 9

The exact amount of money you will need in retirement cannot be predicted accurately.

Question 10

At age 65, the life expectancy of a man is 14 years.

Question 11

At age 65, the life expectancy of a woman is 13 years.

Question 12

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

Question 13

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

Question 14

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

Question 15

Your expenses for leisure activities will probably increase during retirement.

Question 16

Your spending patterns during retirement will probably not change.

Question 17

Your current assets include everything you own that has value.

Question 18

Some experts suggest starting estate planning while you are still in school.

Question 19

The housing needs of people do not change much as they grow older.

Question 20

At age 65, the life expectancy of a man is 7 years.

Question 21

You can qualify for reduced CPP retirement benefits at age 50.

Question 22

The Canada Pension Plan (CPP) includes disability, retirement, and survivor benefits.

Question 23

At age 65, the life expectancy of a man is 18 years.

Question 24

Annuities are meant to provide retirement income in much the same way as a salary provides regular income.

Question 25

You can qualify for reduced CPP retirement benefits at age 60.

Question 26

Unless it is indexed, an annuity provides no protection from inflation.

Question 27

When I retire, my pension benefits will increase to keep pace with inflation.

Question 28

Which statement is correct about retirement planning of young professionals?

A)They don't want to retire with plenty of money.
B)They would rather save money now for retirement than spend it.
C)They are not worried about having enough money to retire comfortably.
D)Young people are in the best position to save.
E)Saving money does not come naturally to many young people.

Question 29

There are hardly any psychological benefits of working part-time during your retirement.

Question 30

In an RRSP, contributions are tax-deductible and earnings accumulate tax free.

Question 31

When I retire, I can depend on the government and my company pension to pay for my basic living expenses.

Question 32

Staying in their present home is the alternative preferred by most of the persons who are approaching retirement.

Question 33

Even if it is a life annuity, payments cannot continue until death.

Question 34

An employee whose pension has not vested will lose all contributions to her pension plan if she transfers to a new employer.

Question 35

The contribution you are required to make to the CPP is fixed.

Question 36

Federal programs are the major source of public retirement pensions.

Question 37

At age 65, the life expectancy of a woman is 21 years.

Question 38

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

A)I should update my retirement plan periodically.
B)My pension benefits will increase to keep pace with inflation.
C)Saving just a little bit won't help.
D)My employer's health insurance plan will cover my medical expenses.
E)Medicare will cover my medical expenses.

Question 39

The first step in stretching your retirement income is to make sure you are receiving all the income to which you are entitled.

Question 40

Which one(s) of the following is (are) misconceptions about retirement planning?

A)My expenses will drop when I retire.
B)My retirement will last only 15 years.
C)I can depend on government benefits.
D)I can depend on my company pension.
E)My expenses will drop when I retire, my retirement will last only 15 years, I can depend on government benefits, and my company pension are misconceptions.

Question 41

When a lender uses your house as collateral to buy an annuity for you from a life insurance company, it is called:

A)an obverse annuity mortgage.
B)mortgage life insurance.
C)a reverse mortgage annuity.
D)a fixed annuity with level premium.
E)whole life insurance.

Question 42

Some retirement planning experts suggest that you start retirement planning while you are:

A)in school.
B)in college.
C)in graduate school.
D)middle-aged.
E)still employed.

Question 43

According to most financial planners, you will need about __________ percent of your current pre-tax income to maintain your standard of living in retirement.

A)50
B)60
C)70
D)80
E)90

Question 44

Your first step in retirement planning is to:

A)estimate your spending needs.
B)analyze your current assets and liabilities.
C)adjust your spending needs for inflation.
D)evaluate your planned retirement income.
E)determine if you'll have to work during retirement.

Question 45

A(n) ____________ is appealing because it allows people to stay in their homes as they grow older and frail.

A)accessory apartment
B)caretaker arrangement
C)commercial rental
D)universal design home
E)congregate housing

Question 46

How many years can you expect to spend in retirement?

A)1 to 5 years
B)6 to 10 years
C)10 to 12 years
D)12 to 16 years
E)up to 16 to 20 years

Question 47

Possible sources of income for many retirees include

A)government benefits.
B)public pension plans.
C)employer pension plans.
D)personal retirement plans and annuities.
E)government benefits, public pension plans, employer pension plans, personal retirement plans and annuities are possible sources of income.

Question 48

Which one(s) of the following is(are) tips from retirement specialists on how to uncover hidden taxes and other costs of a retirement area?

A)Contact the local Chamber of Commerce to get an economic profile.
B)Contact the provincial tax department to find out provincial, sales, and inheritance taxes.
C)Call a local accountant to find out which taxes are rising.
D)Rent for a while instead of buying immediately.
E)Contact the local Chamber of Commerce to get an economic profile, contact the provincial tax department to find out provincial, sales, and inheritance taxes, call a local accountant to find out which taxes are rising, and rent for a while instead of buying immediately are correct.

Question 49

One of the following is not an advantage of the Canada Pension Plan retirement income:

A)earned income partially offsets benefits.
B)forced savings.
C)portable from job to job.
D)cost shared with employer.
E)survivorship rights.

Question 50

Which statement is correct regarding retirement living expenses?

A)It is impossible to estimate your spending needs.
B)The exact amount of money you'll need is impossible to predict.
C)You'll use a smaller amount of money for food, housing, and medical care.
D)Your spending patterns will probably not change.
E)The exact amount of money you'll need can be accurately predicted.

Question 51

Which housing alternative is preferred by most persons who are approaching retirement?

A)house sharing
B)ECHO unit
C)accessory apartment
D)present home
E)boardinghouse/rooming house

Question 52

Which type of housing is designed to allow people to stay in their homes as they grow older?

A)Accessory apartment
B)ECHO unit
C)Rooming house
D)universal design
E)professional companionship arrangement

Question 53

When you are nearing retirement, it is a good idea to:

A)increase the face value of your life insurance.
B)increase your property insurance coverage.
C)keep your life insurance intact.
D)decrease the face value of your life insurance.
E)swap your old life insurance policy with a new one.

Question 54

You can determine your net worth by

A)subtracting your assets from your liabilities.
B)subtracting the value of your home from the mortgage balance.
C)adding your liabilities and assets.
D)subtracting your liabilities from your assets.
E)subtracting your expenses from your income.

Question 55

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

A)insurance
B)federal income taxes
C)clothing expenses
D)work-related expenses
E)provincial income taxes

Question 56

Which of these statements is correct about the Canada Pension Plan (CPP)?

A)The CPP dates back to 1996.
B)There are three types of CPP benefits.
C)CPP contribution is based on your age.
D)The federal government matches the CPP contributions of self-employed individuals.
E)If you can begin receiving your CPP benefits at the age of 50.

Question 57

You can get a reverse mortgage annuity if:

A)you are at least 55 years old.
B)you are five years from retirement.
C)your mortgage is largely or completely paid off.
D)you are recently retired.
E)you need a loan.

Question 58

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

A)food and medical care
B)federal income taxes
C)expenses for leisure activities
D)medical expenses
E)insurance

Question 59

Many people make the move into retirement housing without:

A)considering seasonal factors.
B)experiencing many obstacles.
C)a spouse or companion.
D)doing enough research.
E)the proper accommodations.

Question 60

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

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

Question 61

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

A)clothing expenses
B)federal income taxes
C)provincial income taxes
D)work-related expenses
E)leisure activity expenses

Question 62

An employee who is seeking the greatest security in her pension income would choose which of the following?

A)Deferred Profit Sharing Plan (DPSP)
B)Defined Contribution Pension Plan (DCPP)
C)Group Registered Retirement Savings Plan (Group RRS))
D)Defined Benefit Pension Plan (DBPP)
E)Dividend Reinvestment Plan (DRIP)

Question 63

What is the most popular personal retirement plan?

A)Deferred Profit Sharing Plan
B)Registered Pension Plan
C)Registered Retirement Savings Plan
D)Canada Pension Plan
E)New Seniors Benefit

Question 64

Which of the following is not a public pension plan in Canada?

A)CPP
B)QPP
C)OAS
D)RRSP
E)ETA

Question 65

At age 65, what is the average life expectancy of a man?

A)4 years
B)7 years
C)9 years
D)12 years
E)18 years

Question 66

If a retiree wishes a predictable income in retirement, at the age of 71 she should transfer her RRSP into a(n) _________________.

A)RRIF
B)Annuity
C)Mutual fund
D)Cash
E)GIC

Question 67

To stretch your income during retirement, you could

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)not travel.

Question 68

Which of the following requires mandatory contributions from workers earning in excess of $3,500 a year?

A)Quebec Pension Plan (QPP)
B)Old Age Security (OAS)
C)Defined Benefit Pension Plan (DBPP)
D)Registered Retirement Savings Plan (RRSP)
E)Dividend Reinvestment Plan (DRIP)

Question 69

Which employer pension plan has an individual account for each employee?

A)undefined-contribution plan
B)defined-contribution plan
C)defined-benefit plan
D)undefined-benefit plan
E)surplus-employee plan

Question 70

The first step in stretching your retirement income is to make sure that you are

A)contributing to the CPP.
B)covered by an employer pension plan.
C)contributing to a RRIF.
D)saving funds in a RRSP.
E)receiving all of the income to which you are entitled.

Question 71

Which of the following statements is false?

A)Payments for a life annuity can continue until death.
B)Transfers between annuity companies are tax-free.
C)Annuities are legitimate tax shelters.
D)An annuity has no investment limit.
E)Annuities provide opportunities for retirement income to grow.

Question 72

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

A)clothing expenses
B)federal income taxes
C)medical expenses
D)work-related expenses
E)provincial income taxes

Question 73

Which statement is correct regarding retirement living expenses?

A)It is impossible to estimate your spending needs.
B)Your spending patterns will probably change.
C)You'll use a smaller amount of money for food, housing, and medical care.
D)Your spending patterns will probably not change.
E)The exact amount of money you'll need can be accurately predicted.

Question 74

An annuity in which you receive an income for the rest of your life, but no payments are made to anyone after your death is called:

A)fixed-term annuity.
B)life annuity.
C)installment refund annuity.
D)Registered Retirement Income Fund.
E)money purchase pension plan

Question 75

Over the last two decades, companies have switched their retirement plans from ______________ to _______________.

A)RPPs; GRRSPs
B)DPSPs; defined-benefits
C)defined benefits; defined contributions
D)defined contributions; defined benefits
E)DPSPs; defined contributions

Question 76

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

A)defined-contribution plan
B)undefined-contribution plan
C)undefined-benefit plan
D)defined-benefit plan
E)surplus-employee plan

Question 77

Be certain you don't let your ____________ birthday roll by without a comprehensive retirement plan.

A)25^th
B)35^th
C)45^th
D)55^th
E)65^th

Question 78

At age 65, what is the average life expectancy of a woman?

A)9 years
B)12 years
C)15 years
D)21 years
E)30 years

Question 79

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

A)food and medical care
B)clothing expenses
C)expenses for leisure activities
D)medical expenses
E)insurance

Question 80

You can expect to spend about ________ years in retirement

A)5-10
B)11-15
C)16-20
D)21-25
E)26 or more