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Exam 18: Starting Early: Retirement Planning

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Question 31

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

A) True
B) False

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Question 32

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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) adding the value of your home to that of your other assets.

F) C) and D)
G) B) and C)

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Question 33

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

At a 3 percent rate of inflation,approximately how many years will it take for prices to double?

Possible sources of income for many retirees include:

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

Too many people make the move to change housing during retirement without doing enough research.

Whether or not you are covered by a pension plan,you can still make nondeductible IRA contributions.

Which type of housing is preferred by most people who are approaching retirement?

Over the last two decades,the defined-benefit plan has continued to grow rapidly while the number of defined-contribution plans has generally dropped.

Developing the habit of saving for retirement is easier when you are:

Why is financial planning for retirement vitally important?

Your right to at least a portion of the benefits you have accrued under an employer pension plan is called:

Which of the following is typically a characteristic of a defined benefit plan?

According to the 2012 Trustees Report,in what year is it projected that the funds available for paying Social Security benefits will be exhausted at current benefit and tax rates?

If you leave the company before you retire,then you have a right to a portion of the benefits under an employer pension plan only if you are vested.

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

Jasmine Smith owns a condo worth $240,000,a car valued at $25,000,and miscellaneous assets worth $7,500.She owes $185,000 on the condo and $15,000 on the car and has no other debts.Her retirement account,in which she is fully vested,contains $27,500 in mutual funds.She was just insured with a $500,000 term life insurance policy.What are her total assets?

Divorcing couples should pay attention to the tax implications of retirement benefits.

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