SOA Exam #2 UPDATED ACTUAL Exam
Questions and CORRECT Answers
The privatization of Social Security would mandate that individuals be more in charge of their
own retirement and the government less responsible. One country with a privatization program in
existence is: - CORRECT ANSWER - Chile
In the last 40 years, there has been a vast improvement in the economic position of the aged. -
CORRECT ANSWER - True
All of the following are risks of privatization except: - CORRECT ANSWER - some
individuals would not have money to invest in the system.
The baby boom generation has had fewer opportunities than their parents. One reason for this
lack of opportunity is: - CORRECT ANSWER - competition among members of this cohort.
An increase in payroll tax, to increase the Social Security fund, will fall heavily on middle-age
workers. - CORRECT ANSWER - False
One of the changes contributing to the decrease in the Social Security trust fund is decline in the
birthrate. - CORRECT ANSWER - True
All of the following are factors which have improved the economic status of the aged except: -
CORRECT ANSWER - the number of children providing economic support.
Private savings are a third source of income in retirement. Problems with saving for retirement
include all of the following except: - CORRECT ANSWER - little encouragement or advice to
save.
Defined contribution plans represent a savings plan with some tax advantages. Which of the
following is not a problem with defined contribution plans? - CORRECT ANSWER - The
plan is involuntary.
, One major obstacle of means testing is: - CORRECT ANSWER - it discourages savings.
The United States is one of several countries thinking about raising the retirement age. -
CORRECT ANSWER - True
Demographers currently predict that the ___________ will enter retirements with more savings,
better pension coverage, and greater prospects for inheriting wealth than any other generation. -
CORRECT ANSWER - baby boomers
The highest poverty rate is among: - CORRECT ANSWER - single women
The elderly today do not have the diverse source of income compared to the elderly of the 1960s.
- CORRECT ANSWER - False
_________ is the most successful program of the welfare state. - CORRECT ANSWER -
social security
The greatest risk of a means test is it would create two unequal classes of retirees. - CORRECT
ANSWER - True
Saving rates are lower among the elderly because they spend their money on: - CORRECT
ANSWER - health care and housing
Because so much of the net worth of older people is housing wealth, some retirees have started
using their home equity to pay for their retirement. - CORRECT ANSWER - True
Young workers are extremely realistic about what they will need to fund a comfortable lifestyle
in retirement. - CORRECT ANSWER - False
Questions and CORRECT Answers
The privatization of Social Security would mandate that individuals be more in charge of their
own retirement and the government less responsible. One country with a privatization program in
existence is: - CORRECT ANSWER - Chile
In the last 40 years, there has been a vast improvement in the economic position of the aged. -
CORRECT ANSWER - True
All of the following are risks of privatization except: - CORRECT ANSWER - some
individuals would not have money to invest in the system.
The baby boom generation has had fewer opportunities than their parents. One reason for this
lack of opportunity is: - CORRECT ANSWER - competition among members of this cohort.
An increase in payroll tax, to increase the Social Security fund, will fall heavily on middle-age
workers. - CORRECT ANSWER - False
One of the changes contributing to the decrease in the Social Security trust fund is decline in the
birthrate. - CORRECT ANSWER - True
All of the following are factors which have improved the economic status of the aged except: -
CORRECT ANSWER - the number of children providing economic support.
Private savings are a third source of income in retirement. Problems with saving for retirement
include all of the following except: - CORRECT ANSWER - little encouragement or advice to
save.
Defined contribution plans represent a savings plan with some tax advantages. Which of the
following is not a problem with defined contribution plans? - CORRECT ANSWER - The
plan is involuntary.
, One major obstacle of means testing is: - CORRECT ANSWER - it discourages savings.
The United States is one of several countries thinking about raising the retirement age. -
CORRECT ANSWER - True
Demographers currently predict that the ___________ will enter retirements with more savings,
better pension coverage, and greater prospects for inheriting wealth than any other generation. -
CORRECT ANSWER - baby boomers
The highest poverty rate is among: - CORRECT ANSWER - single women
The elderly today do not have the diverse source of income compared to the elderly of the 1960s.
- CORRECT ANSWER - False
_________ is the most successful program of the welfare state. - CORRECT ANSWER -
social security
The greatest risk of a means test is it would create two unequal classes of retirees. - CORRECT
ANSWER - True
Saving rates are lower among the elderly because they spend their money on: - CORRECT
ANSWER - health care and housing
Because so much of the net worth of older people is housing wealth, some retirees have started
using their home equity to pay for their retirement. - CORRECT ANSWER - True
Young workers are extremely realistic about what they will need to fund a comfortable lifestyle
in retirement. - CORRECT ANSWER - False
