Test questions CRPC Module 4 with
possible solutions (100%)
A Ross IRA distribution is considered to be qualified if the five-year holding pattern has
been met and - CORRECT ANSWERS-The distribution is made after age 59 1/2
The distribution is made of the following owners death
The distribution is made to find a first time home purchase maximum $10,000
An individual is not considered an active participant in an employer sponsored defined
contribution plan if they only receive what - CORRECT ANSWERS-Interest
Before employing a pension maximization strategy a retiree needs to consider -
CORRECT ANSWERS-His age and the age of his spouse, health and insurability, the
cost of taking a joint life versus a single life annuity, his tax bracket and financial
situation and whether health insurance benefits will be impacted
Describe the difference between term life and cash value life - CORRECT ANSWERS-
Term life provides a death benefit equal to the face value of the policy
Cash value life provides a death benefit and an element of tax deferred savings
Do RMD rules apply to Roth IRA - CORRECT ANSWERS-No
Earned income as defined by the internal revenue code includes - CORRECT
ANSWERS-Alimony, salary, bonuses, fees, commissions
Explain the loan provision option in cash value policies - CORRECT ANSWERS-
Policyholders can borrow an amount equal to some or all of their accumulated cash
value
Facts about a Roth IRA - CORRECT ANSWERS-With drawls from a Roth IRA for a first
time home purchase, up to $10,000, or not penalized if the five-year holding period has
been met. Total IRA contributions, both Ross and traditional, or aggregated and cannot
exceed $6000. Distributions of principal from a Roth IRA are not subject to the 10%
penalty. Finally a Roth Aire is not subject to RMD rules, although Roth 401(k) are
, Fixed annuities - CORRECT ANSWERS-The premiums in a fixed annuity or invested in
the companies general account
Flexibility is the key word that describes what type of life insurance - CORRECT
ANSWERS-Universal life.
Give examples of income that is not considered earned - CORRECT ANSWERS-
Unemployment compensation, passive income, deferred compensation, pension and
annuity payments, Social Security, Worker's Compensation, and capital gains
How are lump sum distribution's from a nonqualified annuity taxed - CORRECT
ANSWERS-Fully taxable until all earnings have been distributed, this is referred to as
last in first out
How do an individual's retirement plan contributions affect active participation status -
CORRECT ANSWERS-An individual who makes voluntary or mandatory requirement
plan contributions is an active participant
How do you investment earnings affect active participant status - CORRECT
ANSWERS-The individual is not an active participant if only earnings are allocated to
their account
How long is a Roth IRA owner required to hold the account before taking a tax free
distribution - CORRECT ANSWERS-A minimum of five years starting on January 1 of
The year the first contribution is made and the owner must be at least 59 1/2
How much may a Roth 401K participant age 50 and older contribute in 2019 -
CORRECT ANSWERS-An additional $6000 as a catch-up provision, this is in addition
to the regular deferral limit of $19,000
Identify benefits for use of home equity for retirement funding by downsizing -
CORRECT ANSWERS-May be able to avoid having a mortgage and may generate
excess cash
Identify benefits for use of home equity forward retirement funding by refinancing -
CORRECT ANSWERS-Lower your monthly payment and may be able to cash out
some of your equity
Identify benefits for use of home equity toward retirement funding by reverse mortgage -
CORRECT ANSWERS-Will receive cash in the form of a monthly payment, whop some,
or line of credit and will not be required to repay it until death or sale of home
Interest only - CORRECT ANSWERS-A beneficiary chooses to preserve the principal
amount of the insurance to proceed and simply receive the interest the proceeds are
well held by the insurance company. That interest will be currently taxable
possible solutions (100%)
A Ross IRA distribution is considered to be qualified if the five-year holding pattern has
been met and - CORRECT ANSWERS-The distribution is made after age 59 1/2
The distribution is made of the following owners death
The distribution is made to find a first time home purchase maximum $10,000
An individual is not considered an active participant in an employer sponsored defined
contribution plan if they only receive what - CORRECT ANSWERS-Interest
Before employing a pension maximization strategy a retiree needs to consider -
CORRECT ANSWERS-His age and the age of his spouse, health and insurability, the
cost of taking a joint life versus a single life annuity, his tax bracket and financial
situation and whether health insurance benefits will be impacted
Describe the difference between term life and cash value life - CORRECT ANSWERS-
Term life provides a death benefit equal to the face value of the policy
Cash value life provides a death benefit and an element of tax deferred savings
Do RMD rules apply to Roth IRA - CORRECT ANSWERS-No
Earned income as defined by the internal revenue code includes - CORRECT
ANSWERS-Alimony, salary, bonuses, fees, commissions
Explain the loan provision option in cash value policies - CORRECT ANSWERS-
Policyholders can borrow an amount equal to some or all of their accumulated cash
value
Facts about a Roth IRA - CORRECT ANSWERS-With drawls from a Roth IRA for a first
time home purchase, up to $10,000, or not penalized if the five-year holding period has
been met. Total IRA contributions, both Ross and traditional, or aggregated and cannot
exceed $6000. Distributions of principal from a Roth IRA are not subject to the 10%
penalty. Finally a Roth Aire is not subject to RMD rules, although Roth 401(k) are
, Fixed annuities - CORRECT ANSWERS-The premiums in a fixed annuity or invested in
the companies general account
Flexibility is the key word that describes what type of life insurance - CORRECT
ANSWERS-Universal life.
Give examples of income that is not considered earned - CORRECT ANSWERS-
Unemployment compensation, passive income, deferred compensation, pension and
annuity payments, Social Security, Worker's Compensation, and capital gains
How are lump sum distribution's from a nonqualified annuity taxed - CORRECT
ANSWERS-Fully taxable until all earnings have been distributed, this is referred to as
last in first out
How do an individual's retirement plan contributions affect active participation status -
CORRECT ANSWERS-An individual who makes voluntary or mandatory requirement
plan contributions is an active participant
How do you investment earnings affect active participant status - CORRECT
ANSWERS-The individual is not an active participant if only earnings are allocated to
their account
How long is a Roth IRA owner required to hold the account before taking a tax free
distribution - CORRECT ANSWERS-A minimum of five years starting on January 1 of
The year the first contribution is made and the owner must be at least 59 1/2
How much may a Roth 401K participant age 50 and older contribute in 2019 -
CORRECT ANSWERS-An additional $6000 as a catch-up provision, this is in addition
to the regular deferral limit of $19,000
Identify benefits for use of home equity for retirement funding by downsizing -
CORRECT ANSWERS-May be able to avoid having a mortgage and may generate
excess cash
Identify benefits for use of home equity forward retirement funding by refinancing -
CORRECT ANSWERS-Lower your monthly payment and may be able to cash out
some of your equity
Identify benefits for use of home equity toward retirement funding by reverse mortgage -
CORRECT ANSWERS-Will receive cash in the form of a monthly payment, whop some,
or line of credit and will not be required to repay it until death or sale of home
Interest only - CORRECT ANSWERS-A beneficiary chooses to preserve the principal
amount of the insurance to proceed and simply receive the interest the proceeds are
well held by the insurance company. That interest will be currently taxable
