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Exam 18: Starting Early: Retirement Planning

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Question 81

True/False

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One of the misconceptions about retirement is that your expenses will drop when you retire.

A) True
B) False

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Question 82

Multiple Choice

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Which one of the following is a disadvantage associated with Social Security retirement income?

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

F) A) and D)
G) B) and E)

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Question 83

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Ben Carmichael has been making contributions into an individual retirement account for his retirement.His contributions are tax deductible as his employer does not offer a retirement plan.What type of individual retirement account does he have?

What are the key steps in retirement planning?

The straight life annuity gives more income per dollar of outlay than any other type.

What types of housing options are available to retirees?

Although medical expenses vary from person to person,they tend to decrease with age.

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

Which one of the following is not a typical characteristic of a defined benefit plan?

ERISA established the Pension Benefit Guaranty Corporation (PBGC).

You can determine your net worth by:

In respect to your federal income taxes,which one of the following may you have to do during retirement,even if you did not have to do so prior to retiring? (Assume you have both pre- and post-retirement income. )

The current value of your life insurance and pensions are included in your assets.

To offset inflation,your retirement assets must earn enough to keep up with,and even exceed,the rate of inflation.

A SEP-IRA plan is simply an individual retirement account funded by the employer.

A defined-contribution plan has an individual account for each employee;therefore,these plans are also called individual account plans.

Which type of annuity gives more income per dollar of outlay than any other type?

Social Security is a package of protection,providing retirement,survivors',and disability benefits.

During retirement,you should increase your premium payments by increasing the face value of your life insurance.

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 is insured with a $500,000 term life insurance policy.What is her net worth?