CRPC EXAM QUESTION BANK | 2025
COMPLETE ACTUAL EXAM WITH
CORRECT VERIFIED ANSWERS |
ALREADY GRADED A+ | BRAND NEW
Under a special catch-up provision for unused deferrals, an eligible employee who
participates in a 457 plan can make higher contributions in the last ___________
years prior to retirement.
A)
five
B)
three
C)
four
D)
seven - ✔✔✔ Correct Answer > B
,In a 457 plan, the final three-year catch-up provision allows additional annual
deferrals equal to the regular annual deferral during the last three years prior to
retirement. However, the age 50 catch-up may not be used when the final three-
year catch-up is used.
LO 3-8
Under IRC Section 403(b), which of the following organizations can offer a 403(b)
plan?
I. 501(c) tax-exempt organizations
II. Public education
III. Churches that use retirement income accounts
IV. For-profit organizations
A)
I and III
B)
II and IV
C)
I, II, and III
D)
,I, III, and IV - ✔✔✔ Correct Answer > A
501(c) organizations, public education systems, and churches that use retirement
income accounts can offer 403(b) plans. For-profit organizations can establish a
401(k), but not a 403(b) plan.
LO 3-8
If Tom and Jenny want to save a fixed amount annually to accumulate $2 million
by their retirement date in 25 years (rather than an amount that grows with
inflation each year), what level annual end-of-year savings amount will they need
to deposit each year, assuming their savings earn 7% annually? - ✔✔✔ Correct
Answer > Set your calculator to the "End" mode and "1 P/Yr." Inputs: FV =
2000000, I/YR = 7, N = 25, PV = 0, then PMT = $31,621
1-4
Bill and Lisa Hahn have determined that they will need a monthly income of
$6,000 during retirement. They expect to receive Social Security retirement
benefits amounting to $3,500 per month at the beginning of each month. Over
the 12 remaining years of their preretirement period, they expect to generate an
average annual after-tax investment return of 8%; during their 25-year retirement
period, they want to assume a 6% annual after-tax investment return
, compounded monthly. They want to start their monthly retirement withdrawals
on the first day they retire.
What is the lump sum needed at the beginning of retirement to fund this income
stream? - ✔✔✔ Correct Answer > The monthly retirement income need is not
specified as "today's dollars," and no inflation rate specified; therefore, it must be
assumed that the $2,500 net monthly income need represents retirement dollars,
and the retirement period income stream is level. To calculate the lump sum
needed at the beginning of retirement, discount the stream of monthly income
payments at the investment return rate:
10BII+ PVAD calculation:
Set calculator on BEG and 12 periods per year, then input the following:
2,500 [PMT]
25 [SHIFT] [N]
6 [I/YR]
0 [FV]
Solve for PV = $389,957
LO 1-4
Chris and Eve Bronson have analyzed their current living expenses and estimated
their retirement income need, net of expected Social Security benefits, to be
COMPLETE ACTUAL EXAM WITH
CORRECT VERIFIED ANSWERS |
ALREADY GRADED A+ | BRAND NEW
Under a special catch-up provision for unused deferrals, an eligible employee who
participates in a 457 plan can make higher contributions in the last ___________
years prior to retirement.
A)
five
B)
three
C)
four
D)
seven - ✔✔✔ Correct Answer > B
,In a 457 plan, the final three-year catch-up provision allows additional annual
deferrals equal to the regular annual deferral during the last three years prior to
retirement. However, the age 50 catch-up may not be used when the final three-
year catch-up is used.
LO 3-8
Under IRC Section 403(b), which of the following organizations can offer a 403(b)
plan?
I. 501(c) tax-exempt organizations
II. Public education
III. Churches that use retirement income accounts
IV. For-profit organizations
A)
I and III
B)
II and IV
C)
I, II, and III
D)
,I, III, and IV - ✔✔✔ Correct Answer > A
501(c) organizations, public education systems, and churches that use retirement
income accounts can offer 403(b) plans. For-profit organizations can establish a
401(k), but not a 403(b) plan.
LO 3-8
If Tom and Jenny want to save a fixed amount annually to accumulate $2 million
by their retirement date in 25 years (rather than an amount that grows with
inflation each year), what level annual end-of-year savings amount will they need
to deposit each year, assuming their savings earn 7% annually? - ✔✔✔ Correct
Answer > Set your calculator to the "End" mode and "1 P/Yr." Inputs: FV =
2000000, I/YR = 7, N = 25, PV = 0, then PMT = $31,621
1-4
Bill and Lisa Hahn have determined that they will need a monthly income of
$6,000 during retirement. They expect to receive Social Security retirement
benefits amounting to $3,500 per month at the beginning of each month. Over
the 12 remaining years of their preretirement period, they expect to generate an
average annual after-tax investment return of 8%; during their 25-year retirement
period, they want to assume a 6% annual after-tax investment return
, compounded monthly. They want to start their monthly retirement withdrawals
on the first day they retire.
What is the lump sum needed at the beginning of retirement to fund this income
stream? - ✔✔✔ Correct Answer > The monthly retirement income need is not
specified as "today's dollars," and no inflation rate specified; therefore, it must be
assumed that the $2,500 net monthly income need represents retirement dollars,
and the retirement period income stream is level. To calculate the lump sum
needed at the beginning of retirement, discount the stream of monthly income
payments at the investment return rate:
10BII+ PVAD calculation:
Set calculator on BEG and 12 periods per year, then input the following:
2,500 [PMT]
25 [SHIFT] [N]
6 [I/YR]
0 [FV]
Solve for PV = $389,957
LO 1-4
Chris and Eve Bronson have analyzed their current living expenses and estimated
their retirement income need, net of expected Social Security benefits, to be
