Retirement planning spans the client’s life cycle. Planners need to instruct clients that retirement planning is not a function restricted to later life.
Retirement defies a regular definition because there are too many variables, lifestyle choices, and contingencies that make it unique for each client.
a) True
b) False
a) True
Survey after survey indicates that retirement planning is a top consumer priority.
a) True
b) False
a) True
The number of 85-year-olds will quadruple by 2050.
a) True
b) False
a) True
Men provide more caregiving than women in the United States.
a) True
b) False
b) False
Women account for approximately 72 percent of caregivers in the United States.
Only 1 percent of children are living in homes with grandparents.
a) True
b) False
b) False
Almost 8 percent of all children are living in homes with grandparents.
Serving the client’s retirement planning needs often means coordinating with other financial services professionals as well as geriatric care managers.
a) True
b) False
a) True
During the savings phase of retirement planning, clients often start to limit expenses and save all their salary increases in a 401(k) plan or IRA
a) True
b) False
b) False
During the savings phase, clients are often preoccupied with other financial objectives. Planners need to encourage clients to save for retirement and to use rollovers when changing jobs. Limiting expenses and saving salary increases often happens in the later part of the increased preparation and visualization phase.
Most people report that they have enough knowledge to make appropriate investment decisions for retirement.
a) True
b) False
b) False
According to the 10th Annual Transamerica Retirement Services survey, 68 percent of workers either strongly agree or agree somewhat that they do not know as much about investing as they should.
Less than 10 percent of retirement plan participants contribute the maximum to their plan
a) True
b) False
a) True
The inability to keep track of money and bills is an activity of daily living (ADL).
a) True
b) False
b) False
The inability to keep track of money and bills is known as an instrumental activity of daily living (IADL).
The litany of biological changes in the aging process includes mundane changes such as lentigo, which is discoloration or spotting that occurs on the face, backs of the hands, and forearms of people over 50.
a) True
b) False
a) True
Fifty percent of people over age 65 develop dementia.
a) True
b) False
b) False
Only 10 percent of people over 65 develop dementia.
One trend in our current pension system that threatens retirement security is a shift from defined-benefit to defined-contribution plans.
a) True
b) False
a) True
The trend is to increase employer-sponsored medical coverage for retirees.
a) True
b) False
b) False
Just the opposite is true. The trend is toward significant cutbacks in employer-sponsored medical coverage.
Around 90 percent of all individuals aged 65 and older report Social Security as a source of income.
a) True
b) False
a) True
Social Security is structured to provide an adequate retirement income for many Americans.
a) True
b) False
b) False
Social Security is only structured to provide a base income. What’s more, the higher the income level, the less of a help it is.
Defined-benefit plans can fund for past service.
a) True
b) False
a) True
Income from private pensions represents about 50 percent of all retirement income.
a) True
b) False
b) False
Income from pensions is only about 20 percent of retirement income.
When retirement seminars are offered, 401(k) participation jumps 17 percent.
a) True
b) False
a) True
Fiscal welfare is a type of social benefit that contains eligibility criteria designed to encourage the able-bodied poor to work by providing minimal benefits.
a) True
b) False
b) False
The statement describes social assistance. Fiscal welfare is an indirect payment made to individuals through the tax system.
Contributions to a 401(k) plan are eligible for the retirement savings contribution credit.
a) True
b) False
a) True
A married person whose adjusted gross income is $150,000 can qualify for the retirement savings contribution credit.
a) True
b) False
b) False
The dollar limit for adjusted gross income is $55,000 for clients who are married filing jointly.
Men of all ages are likely to be poorer than women.
a) True
b) False
b) False
Women of all ages are likely to be poorer than men
SSI eligibility is limited to clients who have very low income and very few assets.
a) True
b) False
a) True
The Older Americans Act assists elderly Americans in part through nutrition programs and the nursing home ombudsman program.
a) True
b) False
a) True
The eldercare locator is a toll-free phone service that can help to find services available for seniors and their families.
a) True
b) False
a) True
Less than 5 percent of those aged 65 to 69 continue to be in the labor force.
a) True
b) False
b) False
Twenty-three percent of those aged 65 to 69 continue to be in the labor force. In addition, 64 percent of older workers report that they plan to work well into their retirement years.
Less than 2 percent of baby boomers have received inheritances that exceed $100,000.
a) True
b) False
a) True
The elderly dependency ratio is declining.
a) True
b) False
b) False
The economic status of the aged has improved over recent decades.
a) True
b) False
a) True
Retirement is typically seen as a busy time.
a) True
b) False
a) True
Women are more likely to have a better social network than men.
a) True
b) False
a) True
Which of the following statements concerning the retirement savings contribution credit is correct?
C) The credit is available for salary deferrals made to a SIMPLE.
A maximum 50 percent of each dollar contributed. The dollar limits are too high. The credit is only available to IRAs; 401(k), 403(b), and 457 plans; SIMPLEs; and SARSEPs.
Which of the following statements concerning the biological concerns with the aging process is correct?
D) Sometimes clients have difficulty with instrumental activities of daily living (IADLs) such as the ability to keep track of money or bills.
Grocery shopping is an IADL not ADL. Only 10% of people over 65 develop dementia. The life span is the maximum potential age of human beings which is about 120 years; 78 years is the average life expectancy.
Which of the following statements concerning the current pension system is (are) correct?
I. The trend of employer plans shifting from defined-benefit plans to defined-contribution plans is seen as having a positive effect on retirement security.
II. The tendency for people to be invested heavily in employer stock is seen as having a positive effect on retirement security.
(D) Neither I nor II
I is incorrect because defined-benefit plans place investment risk on the employer and are considered better for retirement security.
II is incorrect because this trend means that many retirement portfolios are not properly diversified.
Which of the following are steps in the retirement planning process?
I. Planners should gather client data by conducting a financial inventory using the client’s summary plan description and other documents.
II. Planners should help the client implement the plan, which often means working with other professionals in the financial and social service areas.
(C) Both I and II
Which of the following statements concerning financial gerontology is (are) correct?
I. The old-old have a significant income advantage over the young-old.
II. The elderly dependency ratio is currently declining.
(D) Neither I nor II
I is incorrect because the young-old have an income advantage over the old-old.
II is incorrect because the elderly dependency ratio is expected to increase to 30/100 by 2030. (It currently is slightly over 20/100.)
All the following facts concerning demographics and aging in the United States are correct EXCEPT
B) The older population will become less ethnically and racially diverse in the next 50 years.
All the following statements concerning the nature and scope of retirement are correct EXCEPT
C) Policies of the federal government do not typically support the retirement process because of the need to collect additional tax revenues.
Federal governmental policies often support retirement despite the fact that the General Accounting Office estimates the loss of significant tax revenue based on those policies.
All the following statements concerning the nature and scope of retirement are correct EXCEPT
D) Policies of the federal government do not typically support the retirement process because of the need to collect additional tax
revenues.
Federal governmental policies often support retirement despite the fact that the General Accounting Office estimates the loss of significant tax revenue based on those policies.
All the following services are provided by the area agencies on aging (AAA) EXCEPT
C) providing banking, check-writing, and other financial services
AAA does not provide banking, check-writing, and other financial services.
Which of the following statements is correct regarding considerations a planner must take into accountwhen assisting a client with retirement planning?
C) Retirees are often responsible for caring for themselves, their parents, and potentially their grandparents.
As a society we are taking better care of ourselves, and therefore living longer. It is predicted that one in nine baby boomers will live to be at least age 90.
We are living longer; therefore, our retirement life expectancy has increased.
Women continue to have an increasing life expectancy. They account for 58% of those over age 65 and 70% of those 85 and older
Which of the following statements is correct regarding the aging of the American population?
D) Population aging occurs when the proportion of older generations relative to younger generations increases.
Active life expectancy is the measure of the number of years a person can expect to live without incurring a disability.
Life span, not life expectancy, is the maximum potential age of human beings.
It is predicted that only one in nine baby boomers will live to be at least age 90.
Which of the following statements is/are correct regarding the financial planner’s role in the retirementplanning process?
I. From a planner perspective, the retirement planning process is very similar to the generalfinancial planning process.
II. When establishing the client/planner relationship, planners are not only expected tounderstand financial issues, but also to understand the aging process and non-financial issuesthat come with senior living.
C) Both I and II.
All of the following statements are correct regarding the financial planning process EXCEPT:
D) For the retirement planning process, a planner need only review a client’s assets, liabilities,securities holdings, and annual income.
For the retirement planning process, a planner needs to look at the typical planning information (review assets, liabilities, securities holdings, and annual income) along with wills and trusts, long-term care policies, social security statements, employer health benefit policies, employer summary plans, and employer benefit statements
All of the following are phases of the retirement planning process from the client perspective EXCEPT:
B) Asset allocation.
Asset allocation is not one of the phases of the retirement planning process. The five phases are: saving; increased preparation and visualization; decision making; transitioning to retirement and settling into the retirement lifestyle; coping with frailty
Which of the following statements is correct regarding the retirement planning process?
B) The data gathering phase of the retirement planning process involves conducting a financialinventory of retirement assets.
The first step in the retirement planning process is to establish and define the advisor-client relationship.
A planner should engage other professionals when necessary.
The last step in the retirement planning process is the monitoring of the retirement plan.
The actual plan is developed and presented in Step 4 of the retirement planning process.
All of the following statements are correct regarding step 4 of the retirement planning process(Develop and Present the Retirement Plan) EXCEPT:
B) The advisor implements the retirement plan.
Step 5 of the retirement planning process is the step in which the plan is implemented.
Which of the following statements is/are correct regarding the retirement planning process?
I. When gathering data, a retirement planner need not review a client’s wills and trusts, becausethese documents are used only for estate planning.
II. During the “savings” phase of the process, clients are typically lowering their expenses and saving their annual salary increases in a retirement plan.
D) Neither I nor II.
I is incorrect. Even though wills and trusts are used predominantly for estate planning, a retirement planner should review these documents. In addition, a retirement planner should review the following documents when gathering data:
-Insurance policies
-Social Security benefits statements
-Employer documents, such as summary plan descriptions and health insurance policies
-Asset and liability information
II is incorrect. Clients are often more focused on other financial objectives during the “savings” phase of
the retirement planning process. Usually, the decrease in expenses and saving of salary increases occur
during a later phase in the client’s life.
Which of the following statements is correct regarding the phases of retirement planning?
A) The “decision” phase typically begins immediately before retirement, and may include arestructuring of a client’s asset allocation.
The “increased preparation and visualization phase” phase typically begins upon the retirement of the client’s parents.
The “retirement transition and lifestyle phase” is characterized by an increase in spending on travel and volunteer work.
Loss of mobility, caregiving for a spouse, and health issues are all characteristics of the “frailty” phase.
Which of the following statements is/are correct regarding the phases of retirement planning?
I. The “retirement transition and lifestyle phase” of retirement planning is typically accompaniedby a decrease in spending due to the changing environment.
II. The “frailty” phase of retirement planning is not dependent on a certain age, but is determinedby health issues, caregiving for a spouse, and any loss of mobility.
B) Only II.
I is incorrect. The “retirement transition and lifestyle phase” follows immediately after retirement, and is often accompanied by an increase in spending due to increased travel and recreational pursuits.
All of the statements below are correct regarding the phases of retirement planning EXCEPT:
B) The “increased preparation and visualization” phase of the retirement planning process isusually identified between the ages of 45 and 55.
The “increased preparation and visualization” phase cannot be identified with any particular age, although
the earlier it begins, the better for retirement security purposes.
Which of the following statements is correct regarding the aging process?
D) Discoloration that occurs on the face, backs of hands, and forearms of people over 50 isreferred to as lentigo.
Less than 10% of retirement plan participants contribute the maximum to their retirement
plan.
The inability to keep track of money and bills is an instrumental activity of daily living.
One trend in our current retirement system that threatens retirement security is a shift from defined benefit plans to defined contribution plans.
Which of the following statements is/are correct regarding health during retirement?
I. Lifestyle changes can stop or slow the age-related process of disease such as arthritis,diabetes, heart disease, and stroke.
II. Weight training is extremely helpful in eliminating age-related loss of strength, even for womenin their 90s.
C) Both I and II.
All of the following statements are correct regarding shortcomings of the current retirement systemEXCEPT:
D) The Pension Benefit Guaranty Corporation (PBGC) protects nearly 44 million workers in over32,000 401(k) plans.
The PBGC protects defined benefits plans, not 401(k) plans.
Which of the following statements is correct regarding financially successful retirement for women?A. Women have less turnover in the workforce, thus creating an environment for higher savingsopportunities.
b) Women are more likely than men to have an employer-sponsored pension plan, because theyhave historically worked in industries with this benefit.
c) Women often invest their retirement assets too conservatively, causing a savings deficit for retirement.
d) Women are more likely to be single or widowed in retirement; therefore their retirement fundslast longer than a couple of the same age and situation.
c) Women often invest their retirement assets too conservatively, causing a savings deficit for retirement.
Women have a higher turnover in the workforce, so it makes it more difficult for them to accumulate for retirement.
B is incorrect. Women are less likely to have a pension at work than men because they have historically worked in industries that ignore pensions
Women are more likely to be single or widowed in retirement, so there is nobody to share the retirement burden.
Which of the following statements is/are correct regarding the current pension system in the UnitedStates?
I. The tendency for employees to invest a heavy portion of their retirement plan in employer stockis seen as having a negative effect on retirement security.
II. Over time, the ratio of workers paying into the Social Security system to retirees drawing fromthe system has declined.
C) Both I and II.
Which of the following items is/are considered components of the Ladder of Retirement Security?
I. Informed planning.
II Inheritances.
C) Both I and II.
All of the following statements are correct regarding elements of the Ladder of Retirement SecurityEXCEPT:
B) Income from private pensions represents approximately 60% of all retirement income.
Income from private pensions represents approximately 20% of all retirement income.
All of the following statements are correct regarding resources during retirement EXCEPT:
B) The Ladder of Retirement Security does not include retiree health care as an income source during retirement.
Retiree health care (and other insurance) is considered part of the Ladder of Retirement Security.
Which of the following statements is correct regarding demographics of aging?
A) The elderly dependency ratio will rise in the future because the baby boomers were followedby a smaller generation.
Socioeconomic factors positively affect health, including increased likelihood of having health insurance, access to good health care, and access to preventative care (mammograms)
Heart disease and cancer are responsible for two-thirds of all deaths among people age 65 to 84.
Over the past 100 years, women’s life expectancies have increased faster than men’s life expectancies.
Which of the following statements is/are correct regarding gerontology?
I. Continuity theory views the occupational role as the major source of personal validation,especially for men.
II. The Age Discrimination and Employment Act makes it illegal to discriminate against workersover 40 based on age.
B) Only II.
I is incorrect. Crisis theory views the occupational role as the major source of personal validation, especially for men.
Supplemental Security Income is an example of:
A) Social assistance.
Supplemental Security Income is an example of social assistance.
Fiscal welfare is an indirect payment made to individuals through the income tax system.
Which of the following statements is correct regarding the area agencies on aging (AAA)?
D) They can find funded transportation to doctor’s appointments.
AAA does not provide banking, check-writing, or other financial services.
AAA is available in all states.
AAA is administered at the state level by the State Unit on Aging.
Which of the following statements is/are correct regarding financial gerontology?
I. The elderly-dependency ratio is currently increasing.
II. Over recent decades, the economic status of the elderly has declined.
A) Only I.
II is incorrect. Over recent decades, the economic status of the elderly has improved.
Which of the following statements is correct regarding financial gerontology?
D) Both adequate income and good health are important predictors of life satisfaction in retirement.
Women are more likely to have a better social network during retirement than men.
Crisis theory views the occupational role as the major source of personal validation, especially for men.
Most retirees sustain busy and active lives and play a productive part in their families.
