Module 1(1)

Which one of the following client goals is sufficiently specific for retirement planning purposes?

"I want to accumulate $500,000 by December 2020."

Which of the following types of information are important to gather from a client prior to developing retirement planning recommendations? I. his or her desired age of retirement II. the client's assumption for the long-term rate of inflation III. investments the client prefers not to use IV. number of children client and spouse intend to have

I, II, III, and IV

You would like to examine the Smiths' net worth as of Dec. 31, 20XX. You will prepare

a statement of financial position.

When estimating the duration of retirement for planning purposes, the retirement planner should do all of the following except

add 25 years for good measure.

It is anticipated that the percentage of people who continue to work after they reach age 65 or 66 will increase in the future. All of the following are reasons for this increase except

almost all categories of living expenses increase during retirement years.

You have completed all of the activities involved in the data gathering step of the financial planning process, including obtaining sufficient quantitative information and documents. What is the next step of the process?

analyzing and evaluating the client's information

Mary wants to retire the first of next year. She wants to receive monthly retirement income payments on the first day of each month. To solve the amount of capital required to provide her the income she wants, you need to solve for

annuity due—set calculator at begin.

Which one of the following is an incorrect statement regarding retirement spending habits?

automobile-related costs increase

Discounting and ___________ are opposite time value of money concepts.

compounding

When gathering data during the retirement planning process, financial goals should be quantified in dollar amounts and which of the following?

established time frames.

You have just finished identifying and disclosing all of the apparent and potential conflicts of interest in the relationship with your client. What is the next step that you would undertake as you continue through the planning process?

gather information necessary to fulfill the engagement

A fiduciary has five major responsibilities. These include all but which one of the following?

have annual meetings with clients

All of the following are considered foundation financial goals except

helping grandchildren with college.

Prior to providing retirement planning services, the scope of the services offered should be mutually defined by the planner and client. This initial discussion should not include which one of the following topics?

identifying specific funds in which to invest.

When a client's funds are insufficient to attain retirement goals, it is appropriate for the planner to suggest all of the following except

increasing gifts to children.

Industry standards typically consider expenses lasting beyond ____ to be long-term liabilities.

one year.

During retirement, John wants to receive $50,000 at the end of each year for the rest of his life. To calculate the amount that he will need to save, you need to solve for

ordinary annuity—set calculator at end.

o calculate retirement needs, planners must make assumptions regarding future trends. These assumptions include all of the following except

political events.

The process of data gathering is the second step in the retirement planning process. All of the following are examples of data to be gathered except

the client's ability to purchase health insurance.

All of the following financial goals may conflict with retirement goals except

wealth accumulation.