Question 1

You can convert your traditional IRA to a Roth IRA.

Accepted Answer

A) True 
 B)False

Question 2

Which federal law sets minimum standards for pension plans in private industry and protects more than 50 million workers?

Accepted Answer

A)   Employee Retirement Income Security Act
B)   Tax Reform Act
C)   Early Retirement Act
D)   Income Protection and Guarantee Act
E)   Civil Rights ActF) B) and D)
G) A) and D)

Question 3

Your Social Security payments will start at age 65 whether you apply for benefits or not.

Accepted Answer

A) True 
 B)False

Question 4

Which retirement plan is specifically designed for self-employed individuals and their employees?

Accepted Answer

A)   Roth IRA
B)   Traditional IRA
C)   Defined-contribution plan
D)   Keogh plan
E)   Defined-benefit planF) All of the above
G) A) and D)

Question 5

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

Accepted Answer

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 IRAsF) C) and D)
G) B) and C)

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A)   Automobile
B)   Jewelry
C)   Bank account
D)   Home
E)   FurnitureF) A) and B)
G) C) and D)

Question 8

Social Security covers what percent of all U.S. workers?

Accepted Answer

A)   72
B)   78
C)   86
D)   97
E)   99F) C) and D)
G) B) and D)

Question 9

Social Security should be the only source of your retirement income.

Accepted Answer

A) True 
 B)False

Question 10

Once you retire, the first step in stretching your retirement income is to make sure that you are:

Accepted Answer

A)   contributing to Social Security.
B)   covered by an employer pension plan.
C)   contributing to a 401(k)  plan.
D)   saving funds in an IRA.
E)   receiving all of the income to which you are entitled.F) A) and B)
G) A) and C)

Question 11

Only saving now and curtailing current spending can ensure comfortable retirement later.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

To boost demand for universal design homes, builders are marketing to families of all ages.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A)   House-sharing
B)   Present home
C)   A smaller apartment
D)   Nursing home
E)   Boarding-house/rooming houseF) A) and D)
G) A) and E)

Question 16

You can put your IRA funds in many kinds of investments, including stock, bonds, mutual funds, real estate, and U.S.-minted gold and silver coins.

Accepted Answer

A) True 
 B)False

Question 17

People born after 1928 need at least 60 quarters of coverage to qualify for Social Security benefits.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

When a lender uses your house as collateral to buy an annuity for you from a life insurance company, it is called:

Accepted Answer

A)   an obverse annuity mortgage.
B)   a reverse annuity mortgage.
C)   mortgage life insurance.
D)   a level-premium annuity.
E)   whole life insurance.F) A) and C)
G) B) and C)

Exam 18: Starting Early: Retirement Planning

Social Security covers what percent of all U.S. workers?

Correct AnswerverifiedShow Answer

Social Security should be the only source of your retirement income.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Your Social Security payments will start at age 65 whether you apply for benefits or not.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Only saving now and curtailing current spending can ensure comfortable retirement later.

Correct AnswerverifiedShow Answer

People born after 1928 need at least 60 quarters of coverage to qualify for Social Security benefits.

Correct AnswerverifiedShow Answer

You can convert your traditional IRA to a Roth IRA.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which retirement plan is specifically designed for self-employed individuals and their employees?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When a lender uses your house as collateral to buy an annuity for you from a life insurance company, it is called:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

You can put your IRA funds in many kinds of investments, including stock, bonds, mutual funds, real estate, and U.S.-minted gold and silver coins.

Correct AnswerverifiedShow Answer

To boost demand for universal design homes, builders are marketing to families of all ages.

Correct AnswerverifiedShow Answer

Once you retire, the first step in stretching your retirement income is to make sure that you are:

Correct AnswerverifiedShow Answer

Which federal law sets minimum standards for pension plans in private industry and protects more than 50 million workers?

Correct AnswerverifiedShow Answer

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