CRPC YOU GOT THIS STUDY CARDS FINAL PAPER EXAM QUESTIONS ACCURATE ANSWERS
FULL SOLUTION
Question:
Flexibility is the key word that describes whole life. variable life. term life. universal life.
Answer:
universal life. The key word for term life is low-cost (relative to other options). The key word for
whole life is guaranteed. For variable life, the key term is variable. Universal life offers a significant
degree of flexibility. Sam, age 62, retired two years ago and is currently relying on his Social
Security retirement benefit for income. Faced with a tight budget, Sam is considering going back to
work. Which one of the following would not be true if he returned to work? He may be eligible for
employer-paid health care coverage. Regardless of the income he earns, he will continue to receive
his full Social Security benefit. When he fully retires he will have fewer years of retirement to
finance.
Question:
He could establish and fund an IRA with his earned income.
Answer:
Regardless of the income he earns, he will continue to receive his full Social Security benefit.
Old-age benefits of Social Security recipients may be reduced if the client earns income from wages
and salary during retirement prior to Social Security's full retirement age. Benefits paid to persons in
the years prior to attaining full retirement age are reduced by $1 for every $2 earned over the limit.
Question:
Earned income, as defined by the Internal Revenue Code, includes all of the following except
alimony. salary. bonuses. Social Security income.
Answer:
Social Security income. Earned income only includes salary, fees, bonuses, commissions, and
taxable alimony.
, Question:
An individual is not considered an "active participant" in an employer-sponsored defined
contribution plan if they receive only which one of the following annual additions? interest
employee contributions forfeitures
Answer:
interest Only employee and employer contributions and forfeitures result in active participant status.
Investment earnings credited to an individual's account do not.
Question:
Jane Pascheon has contributed $1,000 each year to a Roth IRA, beginning with an initial payment of
$500 on December 31, 2014. At which date will she meet the requirement that qualifies her for
tax-free distributions of gains in her account?
Answer:
January 1, 2019 A Roth IRA owner is required to hold the account for a minimum of five years to
qualify for tax-free distributions, starting on January 1st of the year the first contribution is made.
The clock started on January 1, 2014, so five years will have elapsed on January 1, 2019. In
addition, the owner must be at least age 59½.
Question:
All of the following are true regarding Roth 401(k)s except if an individual starts contributing to a
Roth 401(k) and has an existing Roth IRA, each account will have its own separate five-year clock.
required minimum distributions apply. the regular deferral limit is $19,000 in 2019. a $1,000
catch-up provision is available to individuals age 50 and older.
Answer:
a $1,000 catch-up provision is available to individuals age 50 and older. In 2019, participants age 50
and older can contribute an additional $6,000 as a catch-up provision; this is in addition to the
regular deferral limit of $19,000.
Question:
Which one of the following statements applies to fixed annuities? Their objective is to outpace
inflation. The premiums are invested in the company's general account. A rider can be added so that
FULL SOLUTION
Question:
Flexibility is the key word that describes whole life. variable life. term life. universal life.
Answer:
universal life. The key word for term life is low-cost (relative to other options). The key word for
whole life is guaranteed. For variable life, the key term is variable. Universal life offers a significant
degree of flexibility. Sam, age 62, retired two years ago and is currently relying on his Social
Security retirement benefit for income. Faced with a tight budget, Sam is considering going back to
work. Which one of the following would not be true if he returned to work? He may be eligible for
employer-paid health care coverage. Regardless of the income he earns, he will continue to receive
his full Social Security benefit. When he fully retires he will have fewer years of retirement to
finance.
Question:
He could establish and fund an IRA with his earned income.
Answer:
Regardless of the income he earns, he will continue to receive his full Social Security benefit.
Old-age benefits of Social Security recipients may be reduced if the client earns income from wages
and salary during retirement prior to Social Security's full retirement age. Benefits paid to persons in
the years prior to attaining full retirement age are reduced by $1 for every $2 earned over the limit.
Question:
Earned income, as defined by the Internal Revenue Code, includes all of the following except
alimony. salary. bonuses. Social Security income.
Answer:
Social Security income. Earned income only includes salary, fees, bonuses, commissions, and
taxable alimony.
, Question:
An individual is not considered an "active participant" in an employer-sponsored defined
contribution plan if they receive only which one of the following annual additions? interest
employee contributions forfeitures
Answer:
interest Only employee and employer contributions and forfeitures result in active participant status.
Investment earnings credited to an individual's account do not.
Question:
Jane Pascheon has contributed $1,000 each year to a Roth IRA, beginning with an initial payment of
$500 on December 31, 2014. At which date will she meet the requirement that qualifies her for
tax-free distributions of gains in her account?
Answer:
January 1, 2019 A Roth IRA owner is required to hold the account for a minimum of five years to
qualify for tax-free distributions, starting on January 1st of the year the first contribution is made.
The clock started on January 1, 2014, so five years will have elapsed on January 1, 2019. In
addition, the owner must be at least age 59½.
Question:
All of the following are true regarding Roth 401(k)s except if an individual starts contributing to a
Roth 401(k) and has an existing Roth IRA, each account will have its own separate five-year clock.
required minimum distributions apply. the regular deferral limit is $19,000 in 2019. a $1,000
catch-up provision is available to individuals age 50 and older.
Answer:
a $1,000 catch-up provision is available to individuals age 50 and older. In 2019, participants age 50
and older can contribute an additional $6,000 as a catch-up provision; this is in addition to the
regular deferral limit of $19,000.
Question:
Which one of the following statements applies to fixed annuities? Their objective is to outpace
inflation. The premiums are invested in the company's general account. A rider can be added so that
