SoA Chapter 14 Quiz

All but which one of the following is an option for eliminating the long-term deficit in the Social Security trust fund? A) lowering the retirement age B) reducing benefits C) increasing revenues D) All of these are options for eliminating the long-term deficit in the Social Security trust fund.

A

Privatization would shift some of the responsibility for old age security from the Social Security Administration to A) individual Americans. B) business. C) Medicaid. D) Medicare.

A

Under many firm's vesting rules, workers who haven't been with a company at least _____ years may lose all rights to a pension if they leave the firm before reaching retirement age. A) 10 B) 15 C) 20 D) 25

A

One major objection to means-testing Social Security benefits is: A) it would encourage risk-taking in the stock market. B) it would discourage savings. C) it would prevent people from planning their retirement. D) it would increase the national savings rate and reduce money for investments.

B

Presently, the early retirement age is A) 59 B) 62 C) 65 D) 67

B

Which of the following statements is false? A) The baby boomers have married later than their parents. B) There has been an increase in earning power among men in the baby boomer generation. C) The baby boomers have waited longer to have children than their parents did. D) The baby boomers have had fewer children than their parents.

B

When Social Security was enacted in 1935, the age of eligibility for benefits (the normal retirement age) was set at A) 60 B) 62 C) 65 D) 67

C

Under _____ mandatory savings scheme, workers must place 10 percent of their monthly earnings in a private pension fund selected from those authorized by the government. A) Australia's B) Japan's C) Mexico's D) Chile's

D

Which of the following is not a characteristic of defined benefit plans? A) They typically pay benefits on a monthly basis. B) The amount of the benefit is based on years of service and prior earnings. C) They are often indexed to inflation. D) Individuals are responsible for investing the funds.

D

Which of the following social changes has contributed to the impending depletion of the trust fund that pays Social Security? A) the aging of the baby boom generation B) the significant slowdown in population growth after 1960 C) the fact that people are living longer in old age D) All of these

D

Although the aged as a group are relatively well-off financially, there is a great disparity between the poorest and the most affluent.

False

Public support for Social Security is weak today.

False

Raising the age for full Social Security benefits to 70 means that more people will receive benefits.

False

Raising the early retirement age to 65 would not harm racial and ethnic minorities.

False

The tax that pays for Social Security is the income tax.

False

In the United States, not every employee is eligible for a pension.

True

Median net worth refers to the total value of all assets minus any debts.

True

One country that has a privatization program in place is Chile.

True

Some of the income inequality in later life is the cumulative effect of a lifetime of low wages.

True

Vesting is an important requirement of the defined benefit plans.

True