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Exam 17: Retirement Planning

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Question 71

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Putting money into tax-sheltered retirement plans is the single smartest idea in personal financial planning.

A) True
B) False

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Question 72

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Trusts can only take effect during the grantor's life.

A) True
B) False

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Question 73

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A Keogh plan is applicable to people who are self-employed.

A direct trustee-to-trustee rollover will avoid the IRS's 20 percent withholding on retirement rollover.

In an employer-sponsored retirement plan,the employee should make at least the contributions needed to receive the maximum employer matching contribution provided.

A salary-reduction plan has tax benefits to the employee because the contributed income is not included in the employee's salary.

You can set up an IRA by

A person who inherits or is entitled by law or by the terms of a will to inherit some asset is called an heir.

Funds that are deposited to a deductible retirement plan and not taxed at that time are fully taxable when the money is withdrawn.

At a minimum you should contribute enough into your retirement account to receive the maximum

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

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

Electing to receive Social Security retirement benefits prior to age 67 increases the monthly benefit received.

Experts estimate that retirees need approximately 50 percent of their preretirement income to live comfortably.

A positive aspect of defined-benefit plans is that

Suggestions and recommendations regarding funeral and burial instructions,organ donation wishes,material to be included in the obituary,contact information for relatives and friends,and other information useful to the survivors (such as the location of important documents)are best accomplished via a will.

The primary purpose of the Employee Retirement Income Security Act (ERISA) is to

____ is not a community property state.

The partnership theory of marriage rights is the basis for the presumed intent of wedded couples to share their fortunes equally.

There are a few situations in which the IRS imposes no penalty for early withdrawals from an IRA account.