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Exam 17: Retirement and Estate Planning

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Question 101

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The ______ phase is the years during which you need to save for retirement.

A) accumulation
B) distribution
C) early
D) later

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Question 102

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Which of the following statements regarding Keogh accounts is true?

A) The annual limitation on contributions to Keogh accounts is lower than the annual limitation on IRAs.
B) One must have net self-employment income to contribute to a Keogh account.
C) Earnings on Keogh investments are taxed deferred, but contributions are not tax-deductible.
D) One can contribute to either an IRA or a Keogh, but not both in the same year.

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Question 103

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Cash-balance pension plans are managed like a defined-benefit plan with employers funding a program to provide retirement benefits based on a years-of-service formula.

A married worker who is to receive income from his or her defined-benefit plan can elect to have a higher check that will stop upon his or her death but only if

Parents can use their wills to name the guardian for their minor children.

A beneficiary is a person or organization designated to receive a benefit,such as an IRA or 401(k) plan.

Retirement is the time in life when the major sources of income change from earned income to employer-based retirement benefits,private savings and investments,income from Social Security,and perhaps part-time employment.

The best-known defined-contribution plan is the

Which of the following purposes is never allowed as an early withdrawal from a traditional individual retirement account (IRA) ?

A diversified portfolio that automatically shifts the asset mix away from equities and toward more conservative fixed-income investments as you approach the year of your retirement is called a(n) ____ fund.

A positive aspect of defined-benefit plans is that

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

Retirement plans available to the self-employed include

 IRA funds can be invested in only very low-risk investments.

If you die intestate,your state of residence will decide how your assets are divided.

If the Social Security (FICA plus Medicare) tax rate is 7.65 percent,how much total Social Security tax would be paid by an employee earning $50,000 and his or her employer?

Cliff vesting can result in 100 percent vesting after 3 years of employment.

If the spouse waives his or her survivor's benefits in a defined-benefit retirement plan,the worker's retirement benefit will increase.

Pensions are paid to retirees by organizations such as the Social Security Administration.

If you wait 7-9 years after starting your first full-time to begin saving for retirement,your nest egg at age 67 will likely be about one-half what it would have been if you had started right away.