CRPC ALL EXAM 2024 WITH QUESTIONS AND CORRECT VERIFIED ANSWERS
WITH RATIONALE |ALREADY GRADED A+
Planning for Retirement 20 Years Out - (ANSWER)-Create an emergency fund of three to six
months of living expenses to avoid tapping into your 401(k) or home equity in the event of
an emergency.
-Boost your earning potential and benefits package by contributing the maximum annual
amount to your 401(k), or at least enough to receive any available employer match.
-Ensure you have a diversified investment portfolio so that you are invested for inflation-
fighting growth and your assets are distributed across taxable, tax-deferred, and tax-free
sources. Consider consolidating multiple retirement or brokerage accounts to simplify #$
record keeping and possibly reduce expenses. %
^
&*
Planning for Retirement 10 Years Out - (ANSWER)-Consider any big-ticket financial ()_
commitments you anticipate in the next 10 years and how these items might affect your +
retirement timeline.
-Review your estate documents to ensure the language is up to date. Your estate
documents should include items such as a will, a power of attorney, a living will, a health
care proxy, and possibly a revocable trust.
-Reallocate your investment portfolio based on your earnings timeline, focusing on
performance, risk, and expenses.
Planning for Retirement 5 Years Out - (ANSWER)-Consider any big-ticket financial
commitments you anticipate in the next 10 years and how these items might affect your
retirement timeline.
-Review your estate documents to ensure the language is up to date. Your estate
documents should include items such as a will, a power of attorney, a living will, a health
care proxy, and possibly a revocable trust.
-Reallocate your investment portfolio based on your earnings timeline, focusing on
performance, risk, and expenses.
Defined Benefit Plans - (ANSWER)Businesses today are less likely to offer these plans. DB
plans are designed to provide participants with a guaranted lifetime income or pension;
these plans are becoming increasingly scarce. Mostly, there are costs and risks to
employers and people are living longer!
,CRPC ALL EXAM 2024 WITH QUESTIONS AND CORRECT VERIFIED ANSWERS
WITH RATIONALE |ALREADY GRADED A+
Defined contribution (DC) plans are their replacement. The investment accounts are
focused on investment returns and account value rather than income goals. Plan risks are
borne by the participants, too.
The Six-Step Retirement Planning Process - (ANSWER)1. Establishing and defining the
client-planner relationship
#$
2. Gathering client data including goals %
3. Analyzing and evaluating the client's financial status ^
&*
4. Developing and presenting recommendations
()_
5. Implementing recommendations +
6. Monitoring the implemented recommendations for necessary changes
HINT: If you're having trouble remembering the six steps of the retirement planning
process, try memorizing the following mnemonic: EGADIM (EGAD I Made it)
E - Establish client relationship
G - Gather data
A - Analyze data
D - Develop plan
I - Implement plan
M - Monitor plan
The Role of the Retirement Counselor - (ANSWER)The role of the retirement counselor is to
facilitate comprehensive retirement planning through a prudent and coordinated set of
recommendations consistent with the client's needs, goals, attitudes, and resources. This
invariably requires a relationship between the client and counselor based upon trust and a
mutually defined understanding of the scope of services to be offered.
,CRPC ALL EXAM 2024 WITH QUESTIONS AND CORRECT VERIFIED ANSWERS
WITH RATIONALE |ALREADY GRADED A+
Gathering Data - (ANSWER)You need both quantitative and qualitative date in
understanding the client. The data needed is:-family and dependent data-names,
addresses, telephone numbers of other advisers they work with
-assets, liabilities, net worth
-income data
-insurance and tax situation
-employee financial benefits including stock options #$
-investment experience, holdings, and outlook %
^
-retirement planning data
&*
-client owned business information-time horizons-anticipated educational, gifting, or other ()_
financial requirements +
-client and family health status
-interests
-occupation and employment expectations
-risk tolerance
-changes in lifestyle
-financial goals
There's a CRPC Data Gathering Form - (ANSWER)
Assets - (ANSWER)Cash/cash equivalents, invested assets, and personal assets. Assets
should be valued at their current fair market value.
Leased property and equipment are typically not included as assets but are shown in the
footnotes.
Liabilities - (ANSWER)Amounts owed to creditors and there are both short and long term
liabilities included on the statement of financial position.
, CRPC ALL EXAM 2024 WITH QUESTIONS AND CORRECT VERIFIED ANSWERS
WITH RATIONALE |ALREADY GRADED A+
There are short and long term; short being less than one year from the statement date.
Net Worth - (ANSWER)Net Worth indicates the monetary value the client would have if all
assets were converted to cash at the fair market value listed; then used to pay of
outstanding debts.
#$
Statement of Cash Flow (Income Statement) - (ANSWER)Cash inflows less cash outflows is %
the net cash flow or deficit. ^
&*
()_
Determining Goals - (ANSWER)Goals need to be specific, sometimes multiple.There must +
be clear time horizons and amounts. These goals must be prioritized since there may be
insufficient resources to accomplish them. The typical hierarchy of financial goals are:
1. basic needs
2. safety
3. managing finances (debt, mortgages)
4. esteem (vacations, travel, etc)
5. self-actualization (financial freedom)
Costs for Retirees - (ANSWER)-Many retirees find that they spend less on housing, often
because their mortgages are paid off by the time they retire or because they sell their large
homes and buy smaller, less expensive houses or condominiums. This may not be the case
if a second home is in the plan. Don't forget, though, that even a paid-off home is not
expense-free; real estate taxes, utilities, insurance, and repairs will remain.
-Retirees also tend to spend less on parking, dry cleaning, apparel, and education than do
nonretirees.
-Second cars for married couples are less necessary. Eliminating one vehicle reduces
insurance expenses, vehicle registration taxes, license fees, and maintenance.
-Expenditures for Social Security and retirement plans disappear.
WITH RATIONALE |ALREADY GRADED A+
Planning for Retirement 20 Years Out - (ANSWER)-Create an emergency fund of three to six
months of living expenses to avoid tapping into your 401(k) or home equity in the event of
an emergency.
-Boost your earning potential and benefits package by contributing the maximum annual
amount to your 401(k), or at least enough to receive any available employer match.
-Ensure you have a diversified investment portfolio so that you are invested for inflation-
fighting growth and your assets are distributed across taxable, tax-deferred, and tax-free
sources. Consider consolidating multiple retirement or brokerage accounts to simplify #$
record keeping and possibly reduce expenses. %
^
&*
Planning for Retirement 10 Years Out - (ANSWER)-Consider any big-ticket financial ()_
commitments you anticipate in the next 10 years and how these items might affect your +
retirement timeline.
-Review your estate documents to ensure the language is up to date. Your estate
documents should include items such as a will, a power of attorney, a living will, a health
care proxy, and possibly a revocable trust.
-Reallocate your investment portfolio based on your earnings timeline, focusing on
performance, risk, and expenses.
Planning for Retirement 5 Years Out - (ANSWER)-Consider any big-ticket financial
commitments you anticipate in the next 10 years and how these items might affect your
retirement timeline.
-Review your estate documents to ensure the language is up to date. Your estate
documents should include items such as a will, a power of attorney, a living will, a health
care proxy, and possibly a revocable trust.
-Reallocate your investment portfolio based on your earnings timeline, focusing on
performance, risk, and expenses.
Defined Benefit Plans - (ANSWER)Businesses today are less likely to offer these plans. DB
plans are designed to provide participants with a guaranted lifetime income or pension;
these plans are becoming increasingly scarce. Mostly, there are costs and risks to
employers and people are living longer!
,CRPC ALL EXAM 2024 WITH QUESTIONS AND CORRECT VERIFIED ANSWERS
WITH RATIONALE |ALREADY GRADED A+
Defined contribution (DC) plans are their replacement. The investment accounts are
focused on investment returns and account value rather than income goals. Plan risks are
borne by the participants, too.
The Six-Step Retirement Planning Process - (ANSWER)1. Establishing and defining the
client-planner relationship
#$
2. Gathering client data including goals %
3. Analyzing and evaluating the client's financial status ^
&*
4. Developing and presenting recommendations
()_
5. Implementing recommendations +
6. Monitoring the implemented recommendations for necessary changes
HINT: If you're having trouble remembering the six steps of the retirement planning
process, try memorizing the following mnemonic: EGADIM (EGAD I Made it)
E - Establish client relationship
G - Gather data
A - Analyze data
D - Develop plan
I - Implement plan
M - Monitor plan
The Role of the Retirement Counselor - (ANSWER)The role of the retirement counselor is to
facilitate comprehensive retirement planning through a prudent and coordinated set of
recommendations consistent with the client's needs, goals, attitudes, and resources. This
invariably requires a relationship between the client and counselor based upon trust and a
mutually defined understanding of the scope of services to be offered.
,CRPC ALL EXAM 2024 WITH QUESTIONS AND CORRECT VERIFIED ANSWERS
WITH RATIONALE |ALREADY GRADED A+
Gathering Data - (ANSWER)You need both quantitative and qualitative date in
understanding the client. The data needed is:-family and dependent data-names,
addresses, telephone numbers of other advisers they work with
-assets, liabilities, net worth
-income data
-insurance and tax situation
-employee financial benefits including stock options #$
-investment experience, holdings, and outlook %
^
-retirement planning data
&*
-client owned business information-time horizons-anticipated educational, gifting, or other ()_
financial requirements +
-client and family health status
-interests
-occupation and employment expectations
-risk tolerance
-changes in lifestyle
-financial goals
There's a CRPC Data Gathering Form - (ANSWER)
Assets - (ANSWER)Cash/cash equivalents, invested assets, and personal assets. Assets
should be valued at their current fair market value.
Leased property and equipment are typically not included as assets but are shown in the
footnotes.
Liabilities - (ANSWER)Amounts owed to creditors and there are both short and long term
liabilities included on the statement of financial position.
, CRPC ALL EXAM 2024 WITH QUESTIONS AND CORRECT VERIFIED ANSWERS
WITH RATIONALE |ALREADY GRADED A+
There are short and long term; short being less than one year from the statement date.
Net Worth - (ANSWER)Net Worth indicates the monetary value the client would have if all
assets were converted to cash at the fair market value listed; then used to pay of
outstanding debts.
#$
Statement of Cash Flow (Income Statement) - (ANSWER)Cash inflows less cash outflows is %
the net cash flow or deficit. ^
&*
()_
Determining Goals - (ANSWER)Goals need to be specific, sometimes multiple.There must +
be clear time horizons and amounts. These goals must be prioritized since there may be
insufficient resources to accomplish them. The typical hierarchy of financial goals are:
1. basic needs
2. safety
3. managing finances (debt, mortgages)
4. esteem (vacations, travel, etc)
5. self-actualization (financial freedom)
Costs for Retirees - (ANSWER)-Many retirees find that they spend less on housing, often
because their mortgages are paid off by the time they retire or because they sell their large
homes and buy smaller, less expensive houses or condominiums. This may not be the case
if a second home is in the plan. Don't forget, though, that even a paid-off home is not
expense-free; real estate taxes, utilities, insurance, and repairs will remain.
-Retirees also tend to spend less on parking, dry cleaning, apparel, and education than do
nonretirees.
-Second cars for married couples are less necessary. Eliminating one vehicle reduces
insurance expenses, vehicle registration taxes, license fees, and maintenance.
-Expenditures for Social Security and retirement plans disappear.
