Unit Test 2 - Ch. 14

An estate tax is:

a tax collected on the value of property at the time of death

A defined-contribution retirement plan provides an individual _______________ for each participant.

account

Vesting is:

an employee's right to receive some of the employer's pension plan contributions when leaving before retirement

A person who has been named to receive a portion of your estate after your death is called a(n):

beneficiary

With a Roth IRA, contributions are not tax deductible, but ____________________ accumulate tax free.

earnings

A pension plan is a retirement plan that is funded, at least in part, by an _______________________.

employer

What is Defined-contribution contribution plan?

employer and employee provide funding

Sources of retirement income usually include:

employer pension plans, payments from annuities, public pension plans

What is Defined-benefit benefit plan?

employer provides the funding

A(n) ______________ includes everything you own

estate

What best characterizes estate planning as part of the retirement and financial planning process?

estate planning involves building assets though savings, investing, and insurance AND it involves planning how to distribute your assets at death through a manner you have specified

Your first step in retirement planning is to determine your current ________________ situation.

financial

A(n) _________________ will is one that is usually prepared with the assistance of an attorney.

formal

No _____________ tax is due on gifts up to $14,000 for 2017 to any one person in any one year

gift

To reduce your taxable estate, you can:

give assets during your lifetime

If a will is handwritten it is known an a:

holographic

The building of an estate is done through:

insurance, investments, savings

If you die ___________, you die without a valid will.

intestate

An annuity is a contract that could provide retirement income for a set number of years or for

life

The expenses that typically increase as a result of retirement include:

medical costs, recreation, health insurance

What expense will probably be incurred during retirement?

medical expenses

The belief that you have plenty of time to start saving for retirement is a common _____________ about the retirement years.

myth

Jointly ______________ property passes directly to the joint owner and may be appropriate for some _______________, such as a home

owned, assets

Sources of retirement income include public __________________ plans, employer pension plans, personal retirement plans, and _____________________.

pension, annuities

What is NOT good advice when saving for retirement

saving early in small amounts is not as good as saving later in larger amounts

A(n) ______________ will is always prepared on a preprinted form

statutory

What is the best and most complete definition of estate planning?

the plan for the administration and disposition of property during one's lifetime and at death

What are some myths about retirement?

there's plenty of time for me to start saving for retirement, medicare will cover all my medical expenses, i can depend on social security and pension plan to pay my living expenses, your pension benefits will increase to stay up with inflation

The expenses that may be lower or eliminated during retirement include:

transportation, clothing, income tazes

What is the word used to describe the legal declaration of a person's mind as to the disposition of property after death?

will

What are rules of the traditional IRA?

you can contribute up to $5,500 to a traditional IRA if you are under age 50. you can contribute up to $6,500 to a traditional IRA if you are over age 50.

What are true factors about the rule of a Roth IRA?

you can make contributions after age 70.5, earning accumulate tax free, five years after establishing the account, you can withdraw tax-free distributions if you are at least age 59.5, contributions are not tax deductible

If you are born after 1928, you become eligible for Social Security retirement benefits if you have earned credits based ___________ quarters of work and payment

40

With a(n) _______________, your employer will often match your contributions up to a specific dollar amount or percentage of your salary.

401k plan