Chapter 14
An employer may choose to match the contribution made by employees in a(n): 401(k) plan or a salary-reduction plan. Money-purchase plan. Stock bonus plan. Profit-sharing plan. Individual retirement account.
401(k) plan or a salary-reduction plan.
Employees who were born in 1960 or later can receive full Social Security benefits beginning at age: 59½. 62. 65. 67. 70.
67
A codicil is: A document that explains, adds, or deletes provisions in an existing will. A handwritten will. Another name for the first will an individual writes. A will written in legal code. None of these are correct.
A document that explains, adds, or deletes provisions in an existing will.
The letter of last instruction is: Another name for a will. Legally binding. Another name for a trust. A document that identifies whether you want to be kept alive by artificial means if you become terminally ill and unable to make such a decision. A non-legally binding document that provides information regarding your death such as funeral arrangements.
A non-legally binding document that provides information regarding your death such as funeral arrangements.
When conducting a financial analysis for retirement planning, you should review: Housing Life insurance Other investments Assets All of these are correct
All of these are correct
When you retire versus now, you will probably spend less money on: Clothing Health insurance Medical care Recreation All of these are correct
Clothing
How is eligibility determined for receiving Social Security retirement benefits? Marital status Credits Family size Tax bracket All of these are correct.
Credits
Intestate is: The process of validating a will. A written will. A type of trust. Dying without a valid will. The selection of a trust.
Dying without a valid will.
Annabelle works at Acme Cleaning Company. When she retires, her employer's health insurance plan and Medicare should cover all of her medical expenses. True False
False
Another name for a will is a letter of last instruction. True False
False
Because of the potential effect of inflation, individuals should underestimate the amount of money needed for retirement. True False
False
Estate planning is important for financial planning but not for retirement planning. True False
False
If you are married, all of your assets will automatically pass to your spouse. True False
False
If you die intestate, your property will be distributed according to your wishes. True False
False
If you were born in 1960 or later, you will first become eligible to receive Social Security benefits at age 67. True False
False
Only one will may legally be written during a person's lifetime. True False
False
Probate is a short, quick process. True False
False
Julian's annual contributions to his retirement are not tax-deductible, but his earnings accumulate tax-free. He is investing in a: 401(k) plan. Regular IRA. Roth IRA. SEP plan. Spousal IRA.
Roth IRA.
Jacob is updating his estate planning and wants to draft a legal document that leaves everything to his spouse. He is writing a(n): Exemption trust will. Guardian will. Simple will. Stated amount will. Traditional marital share will.
Simple will.
Eight years ago, Thomas began investing in his Roth IRA. He is now purchasing his first home. He may withdraw some money from his Roth IRA tax-free and penalty-free for this purchase. True False
True
Every adult should have a written will. True False
True
When Paul leaves his job at Acme Bending Company, he may choose to move his 401(k) balance to a plan called a rollover IRA. True False
True
When Social Security was established, it was never intended to provide 100 percent of one's retirement income. True False
True
Your estate consists of everything you own. True False
True
A legal arrangement that helps manage the assets of your estate for your benefit or that of your beneficiaries is called a: Formal will. Trust. Holographic will. Guardian. Statutory will.
Trust.
