CRPC exam 2023/2024 with 100% correct answers

6 Step Retirement Planning Process (EGAD I Made it) - correct answer 1. Establish and Define the Client-Counselor Relationship 2. Gather Client Data, Including Goals and Expectations 3. Analyzing Client Information to Determine Retirement Savings Need 4. Develop and Present Financial Planning Recommendations and/or Alternatives 5. Implement the Financial Plan Recommendations 6. Monitor the Financial Plan Recommendations 3 Current Trends in Retirement Planning - correct answer -Businesses today are less likely to offer defined benefit (DB) plans -Increased focus on planning for longevity -Expansion of employer sponsored financial wellness initiatives -Expansion of plan distribution options Challenges associated with the shift from defined benefit to defined contribution plans - correct answer risks are borne by plan participants/employees rather than sponsors/employer as many employees have little or no financial expertise What is used to construct the personal "statement of financial position" or "balance sheet" as of a specific date - correct answer Assets, Liabilities, and Net Worth What two qualities should retirement goals have to make them useful in planning? - correct answer Specific (event, amount, date/time) & Prioritized (first goal, second goal...) 4 Steps for determining a retirement savings need are as follows: - correct answer 1. Calculate net annual retirement income need 2. Adjust income deficit for inflation over preretirement period 3. Determine total retirement fund needed 4. Determine savings amount needed- level and serial payments Serial Payment is also known as: - correct answer Inflation adjusted annuity Capital Utilization Approach - correct answer When all capital is used through retirement period Inflation Adjusted Return Formula: - correct answer ((1+Rate of Return)/(1+Inflation Rate)-1)x100 Capital Preservation Approach - correct answer Living off only the cash flow of an asset pool Retirement Calculations - correct answer Unless otherwise indicated, retirement income payments are assumed BEG of year while savings to build the retirement fund are deposited at the END of the year If future lump sum payments already inflation adjusted, when calculating income payments use: - correct answer level savings approach When future lump sum payment is inflation adjusted but you want to calculate based off a serial savings approach you need to: - correct answer 1. deflate the lump sum needed at retirement into today's dollars using the inflation rate as the discount rate 2. calculate the payment using the discounted lump sum from step 1 as a future value and an inflation adjusted return as the interest rate 3. once payment has been solved, it will need to be increased by inflation rate in order to arrive at the end of the first year payment Method for realizing/solving several competing financial goals - correct answer Prioritize and sequence them Investment Policy is: - correct answer a coherent set of guidelines for managing financial assets and is in line with a client's goals and the realities of investment markets. This policy provides overarching guidance in the implementation of asset allocation, portfolio management, and investment strategy The purpose