Personal Financial Planning (exam 1) UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS
who should you seek fiduciary advice from a professional
when is the best time to begin financial planning now
what % of adults age 55+ start retirement planning at ages 65%
40-49?
Among workers with access to 401k, what % do not 26%
participate?
What % of workers spend more than expected on health 44%
care?
22% of those filing for bankruptcy in 2008 were in what 55+
age range?
What Is the primary key to wealth? increase assets (and minimize liabilities)
Compensation = __________ + ___________ Income + Benefits
describe the concept of pre-tax earnings its not included in taxable income
what 2 things are included in pre-tax earnings - 401k contributions
- employer paid health insurance
What is the target in terms of refund size with tax returns a small refund
What are fixed expenses? (provide examples) Expenses that cannot be easily changed and remain the same from month to
month. Examples include car payments, mortgage or rent payments, insurance
premiums and real estate taxes.
What are variable expenses? (provide examples) Expenses that vary each month. Examples include car maintenance, gasoline,
food, electricity, heating gas, phone, etc.
Do you withhold fixed or variable expenses? variable
, Describe the ideal budget percentage allocations for Tax - 30%
someone in terms of tax, foundation expenses, savings, Foundation - 45%
and fun Savings - 15%
Fun - 10%
What was the average retirement savings in 2017 for all All households: $2,500
age groups (25-64) for all households? What was it for Retirement account: $50,000
those with a qualified retirement account?
By the time you are in the 55-64 age range, what amount $1,000,000
should you have in your retirement savings account?
What is the top 4 reasons in order why people have a 1. they're already saving enough
negative attitude towards saving? 2. lifestyle purchases
3. lack of financial discipline
4. they live on a paycheck to paycheck basis
What amount is recommended to always have in your $3,000-$5,000
savings account?
Quicken is an example of what kind of banking service? online
Automatic payments are best for which kind of expenses, fixed
variable or fixed?
If you aren't covered with an employer sponsored A roth IRA
retirement plan, what can you set up independently?
Tabitha saved $5,000 a year for ten years ($50,000) Tabitha
beginning at age 22 Tonya saved $10,000 a year for ten
years ($100,000) beginning at age 40Both made the same
investments and realized a compound return of 6%
annuallyWho has more money at age 67?
financial planning process? Gather Info
Establish Client's Objectives
Set Priorities to develop a Comprehensive Plan
What information is needed for the financial planning Statement of cash flow
process? Statement of financial condition
Investments and tax returns
Legal documents-Wills, Powers, Trusts
Risk Management - Insurance and benefits programs
Social Security projections
Ways of saving? CD's, Money market
Safety, low return
Emergency Fund
CORRECT ANSWERS
who should you seek fiduciary advice from a professional
when is the best time to begin financial planning now
what % of adults age 55+ start retirement planning at ages 65%
40-49?
Among workers with access to 401k, what % do not 26%
participate?
What % of workers spend more than expected on health 44%
care?
22% of those filing for bankruptcy in 2008 were in what 55+
age range?
What Is the primary key to wealth? increase assets (and minimize liabilities)
Compensation = __________ + ___________ Income + Benefits
describe the concept of pre-tax earnings its not included in taxable income
what 2 things are included in pre-tax earnings - 401k contributions
- employer paid health insurance
What is the target in terms of refund size with tax returns a small refund
What are fixed expenses? (provide examples) Expenses that cannot be easily changed and remain the same from month to
month. Examples include car payments, mortgage or rent payments, insurance
premiums and real estate taxes.
What are variable expenses? (provide examples) Expenses that vary each month. Examples include car maintenance, gasoline,
food, electricity, heating gas, phone, etc.
Do you withhold fixed or variable expenses? variable
, Describe the ideal budget percentage allocations for Tax - 30%
someone in terms of tax, foundation expenses, savings, Foundation - 45%
and fun Savings - 15%
Fun - 10%
What was the average retirement savings in 2017 for all All households: $2,500
age groups (25-64) for all households? What was it for Retirement account: $50,000
those with a qualified retirement account?
By the time you are in the 55-64 age range, what amount $1,000,000
should you have in your retirement savings account?
What is the top 4 reasons in order why people have a 1. they're already saving enough
negative attitude towards saving? 2. lifestyle purchases
3. lack of financial discipline
4. they live on a paycheck to paycheck basis
What amount is recommended to always have in your $3,000-$5,000
savings account?
Quicken is an example of what kind of banking service? online
Automatic payments are best for which kind of expenses, fixed
variable or fixed?
If you aren't covered with an employer sponsored A roth IRA
retirement plan, what can you set up independently?
Tabitha saved $5,000 a year for ten years ($50,000) Tabitha
beginning at age 22 Tonya saved $10,000 a year for ten
years ($100,000) beginning at age 40Both made the same
investments and realized a compound return of 6%
annuallyWho has more money at age 67?
financial planning process? Gather Info
Establish Client's Objectives
Set Priorities to develop a Comprehensive Plan
What information is needed for the financial planning Statement of cash flow
process? Statement of financial condition
Investments and tax returns
Legal documents-Wills, Powers, Trusts
Risk Management - Insurance and benefits programs
Social Security projections
Ways of saving? CD's, Money market
Safety, low return
Emergency Fund
