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Exam 18: Starting Early: Retirement Planning

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Question 81

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Social Security was originally intended to provide 100 percent of retirement income.

A) True
B) False

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Question 82

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Janice Jacobs is planning for her retirement.She knows what assets and liabilities she has now and expects to have in the future.She knows what her spending patterns are likely to be and adjusted them for inflation.She also has identified all of her sources of income after she retires.Now she is sitting down and planning her income and expenses each month.After she has finished this plan,she knows that she has enough income to cover her expected expenses and still have $200 extra each month for emergencies and other unplanned activities.Even with inflation,she thinks she can sustain this plan for approximately 30 years.What step in the retirement planning process is Janice completing?

A) Analyzing her current assets and liabilities
B) Estimating her spending needs
C) Evaluating her planned retirement income
D) Increasing her retirement income
E) Determining how long her retirement savings will last.

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

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Question 83

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

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

Money-purchase pension plans,stock bonus plans,profit-sharing plans,401(k),403(b)plans,and Section 457 plans are examples of defined-contribution plans.

The average 2016 monthly Social Security benefit for a retired worker is approximately $1,300.

The law exempts all Social Security benefits from federal income taxes.

Some retirement planning experts suggest that you start retirement planning while you are:

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

The full Social Security benefit for a spouse is what percent of the retired worker's full benefit?

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

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

According to the Social Security Administration,disabled workers represent 15% of those who receive Social Security benefits.

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

The Social Security office will require you to provide proof of your age.

All earnings in a tax-sheltered annuity grow without current federal taxation.

You can keep money in most retirement plans indefinitely.

You can only buy an annuity by making periodic payments.

Which one of the following expenditures for retirees is most likely to increase?

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