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Exam 18: Starting Early: Retirement Planning

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Question 61

Multiple Choice

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

A) Employer funded with federal rules setting the amounts that employers must contribute
B) Employee contributions generally required
C) No federal guarantee of benefits
D) Employee-managed investments
E) Account balances transferable to IRAs

F) A) and E)
G) C) and D)

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Question 62

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If your employer is a tax-exempt institution such as a hospital,university,or museum,then the salary reduction plan is called a Section 403(b)plan.

A) True
B) False

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Question 63

Multiple Choice

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

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

It is almost certain that your pension benefits will increase to keep pace with inflation.

You can depend on your employer's health insurance plan and Medicare to pay all your medical expenses when you retire.

If you are a government employee,then the salary reduction plan may be a Section 457 plan.

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

What is most likely to be an individual's single biggest asset?

What are the basic steps in retirement planning?

During retirement,as long as you do not earn more than the annually exempt amount through part-time work,your Social Security payments will not be affected.

If you work after 65,your Social Security benefits will neither increase nor decrease.

The shift to defined-contribution plans has forced employees to take more responsibility for their retirement.

Under certain circumstances,the Roth IRA allows for tax-free,penalty-free distributions.

Besides Social Security,the federal government administers several other retirement plans for federal government and railroad employees.

You can determine your net worth by:

More than half of Americans ages 65 to 74 are still in the workforce.

The biggest benefit of an IRA lies in its tax-deferred earnings growth; the longer the money accumulates tax deferred,the bigger the benefit.

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

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