Question 1

For individuals age 50 and above,the largest permissible yearly IRA contribution is

Accepted Answer

A)  ​20 percent of AGI. 
B)  ​$5,500. 
C)  ​$1,000. 
D)  ​$6,500.

Question 2

The funds contributed into a defined-contribution plan are held by the employer until withdrawn by the employee.

Accepted Answer

A) True 
 B)False

Question 3

The main purpose of using a tax-sheltered retirement account to invest for retirement is to

Accepted Answer

A)  ​have the government ultimately collect more in taxes from you. 
B)  ​leave more money to your heirs. 
C)  ​provide your employer with a tax-deduction. 
D)  ​let you accumulate more money for retirement.​

Question 4

Early retirement from an employer would be most beneficial for a person expecting to live longer than the average life expectancy.

Accepted Answer

A) True 
 B)False

Question 5

Laura and Alan are a married couple with three small children.Alan earns $60,000 a year,but Laura has no earned income.What is the maximum total contribution Laura and Alan can make to their IRA accounts this year?

Accepted Answer

A)  ​$11,000 
B)  ​$5,500 
C)  ​$7,500 
D)  ​$0

Question 6

To account for inflation,the income you earn over the years is ____ in order to calculate your Social Security benefits.

Accepted Answer

A)  ​vested 
B)  ​tax-sheltered 
C)  ​discounted 
D)  ​indexed

Question 7

Tax-sheltered retirement accounts allow investment earnings to grow more quickly than traditional accounts because taxes do not have to be paid on earnings until the money is withdrawn.

Accepted Answer

A) True 
 B)False

Question 8

The trustor gives up the following right(s)under an irrevocable living trust:

Accepted Answer

A)  ​Control of the property 
B)  ​Change of the beneficiaries 
C)  ​Change of the trustees 
D)  ​All of these.

Question 9

In a cash-balance plan,the employer contributes ____ of the funds and the employee contributes ____.

Accepted Answer

A)  ​100 percent;nothing 
B)  any amount;a matched amount 
C)  ​half;half 
D)  ​nothing;100 percent

Question 10

To be fully insured for Social Security retirement benefits,a worker must have ____ Social Security credits.

Accepted Answer

A)  ​6 
B)  ​10 
C)  ​40 
D)  ​50

Question 11

The majority of new employer-sponsored pension plans are defined-benefit plans.

Accepted Answer

A) True 
 B)False

Question 12

The worst aspect of simply taking the money out of an employer-based retirement plan when changing jobs is

Accepted Answer

A)  ​the taxes you must pay. 
B)  ​the rollover penalty. 
C)  ​having to do the paperwork. 
D)  ​the ultimately lower retirement nest egg you will have.

Question 13

A tax-free withdrawal occurs any time you withdraw funds from a retirement account once you reach age 65.

Accepted Answer

A) True 
 B)False

Question 14

Which tax is assessed by the federal government against the estate of deceased person before it is passed to heirs?

Accepted Answer

A)  ​Estate tax 
B)  ​Inheritance tax 
C)  ​Excise tax 
D)  ​Flat tax

Question 15

Only the wealthy have an estate.

Accepted Answer

A) True 
 B)False

Question 16

In order to avoid income tax withholding and an early withdrawal penalty when moving retirement funds from one account to another you must

Accepted Answer

A)  ​use a rollover IRA. 
B)  ​make a trustee-to-trustee rollover. 
C)  ​take possession of the funds yourself before making the move. 
D)  ​buy an annuity with the funds.

Question 17

Annuities are usually sold by insurance companies.

Accepted Answer

A) True 
 B)False

Question 18

The wealth you accumulate over your lifetime less any debts you owe is your estate.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is not an example of nonprobate property?

Accepted Answer

A)  ​Property owned by joint-tenancy with rights of survivorship 
B)  ​Property designated in a will 
C)  ​A retirement account such as a 401(k)or IRA 
D)  ​A bank account with a payable-on-death designation

Question 20

Dennis Ackley,an innovator in retirement education,suggests looking at your retirement as something you "buy" on the layaway plan.

Accepted Answer

A) True 
 B)False

Exam 17: Retirement Planning

For individuals age 50 and above,the largest permissible yearly IRA contribution is

The funds contributed into a defined-contribution plan are held by the employer until withdrawn by the employee.

The main purpose of using a tax-sheltered retirement account to invest for retirement is to

Early retirement from an employer would be most beneficial for a person expecting to live longer than the average life expectancy.

Laura and Alan are a married couple with three small children.Alan earns $60,000 a year,but Laura has no earned income.What is the maximum total contribution Laura and Alan can make to their IRA accounts this year?

To account for inflation,the income you earn over the years is ____ in order to calculate your Social Security benefits.

Tax-sheltered retirement accounts allow investment earnings to grow more quickly than traditional accounts because taxes do not have to be paid on earnings until the money is withdrawn.

The trustor gives up the following right(s) under an irrevocable living trust:

In a cash-balance plan,the employer contributes of the funds and the employee contributes .

To be fully insured for Social Security retirement benefits,a worker must have ____ Social Security credits.

The majority of new employer-sponsored pension plans are defined-benefit plans.

The worst aspect of simply taking the money out of an employer-based retirement plan when changing jobs is

A tax-free withdrawal occurs any time you withdraw funds from a retirement account once you reach age 65.

Which tax is assessed by the federal government against the estate of deceased person before it is passed to heirs?

Only the wealthy have an estate.

In order to avoid income tax withholding and an early withdrawal penalty when moving retirement funds from one account to another you must

Annuities are usually sold by insurance companies.

The wealth you accumulate over your lifetime less any debts you owe is your estate.

Which of the following is not an example of nonprobate property?

Dennis Ackley,an innovator in retirement education,suggests looking at your retirement as something you "buy" on the layaway plan.