16) When is rolling your lump-sum retirement benefits into an IRA a good financial decision?

A) If you have retired early B) If you have taken a new job

C) If you don't need the funds immediately D) All of the above are correct.

E) Only A and C are correct.

17) Congratulations! You have just retired with $1.4 million dollars in your 401(k) plan. You will be receiving a fairly large Social Security check and you have adequate personal savings outside of your 401(k) to live on for several years. You don't want to lock up your retirement money into an annuity because you want to be flexible for the future. What would be your best option?

A) Purchase an early withdrawal annuity. B) Hire a Certified Financial Planner for investing advice.

C) Roll over the balance into a qualified IRA account. D) All of the above are correct.

E) Only B and C are correct.

18) Like many Americans you know that you must plan your retirement funds carefully because there may be a discrepancy between the funds that you will need to survive on during retirement and the income that you will have available during retirement. What will likely be the relationship between fund needs and income available during retirement for most Americans?

A) They will be close.

B) They will match.

C) They will not be close N income will be greater than needs.

D) They will not be close N needs will be greater than income.

19) 401(k) and 403(b) plans are the most common retirement plans these days. What are the big advantages to employees with these plans?

A) Many firms contribute an employer match, which represents a 100% risk-free return to the employee.

B) Earnings on your retirement account are tax deferred.

C) You don't pay taxes on money contributed to 401(k) plans.

D) All of the above are correct.

E) Only A and C are correct.

20) Why might one want to select the lump-sum payment option for one's retirement funds?

A) Taking the lump-sum can be a hedge against inflation.

B) You can invest the funds and perhaps earn a higher return.

C) The lump-sum option provides greater flexibility than other options.

D) Having access to the funds provides money for emergencies.

E) All of the above

21) If you estimate you will need $70,000 of after-tax income in retirement and your tax rate is 19%, how much will you need?

A) $70,000 B) $56,700 C) $86,420 D) $76,923

22) A(n) ________ retirement plan is one in which the company will contribute shares of company stock into the employee's account in place of a cash contribution. The employee does well if the company stock appreciates in value, but can suffer dramatically if the stock depreciates in value.

A) 403(b) stock account B) 401(k) stock account C) stock repurchase plan D) ESOP

23) If your pension fund contained a provision that allowed employees who were leaving the company to retain and transfer any pension benefits earned to another pension plan, it would be said to have

A) transference. B) releasability. C) portability. D) transportance. E) none of the above.

24) A defined benefit retirement plan is also known as a/an

A) IRA. B) 403 (b) plan. C) pension plan. D) 401 (k) plan.

25) You are participating in a pension plan where the company's contributions vary from year to year, depending on the firm's performance. This is an example of a(n)

A) earnings establishment plan.

B) profit-sharing plan.

C) variable contribution plan.

D) performance retirement plan.

E) none of the above.

26) Alfred has appointed an executor in his will. This person will be responsible for

A) carrying out Alfred's wishes.

B) acting under the durable power of attorney.

C) managing Alfred's property until the estate is passed on to the heirs.

D) acting under the durable health care power of attorney.

E) both A and C.

27) All of the following features are common to a basic will except

A) establishment of a trust.

B) appointment clause.

C) introductory statement.

D) disposition of property clause.

E) payment of debt and taxes clause.

28) ________ is a type of ownership that exists only between married couples.

A) Common tenancy

B) Tenancy by the entirety

C) Marriage tenancy

D) Survivorship tenancy

E) Conjugal tenancy

29) Within Herbert's will he designates ________ who are willed his property, an ________ who will be responsible for carrying out the provisions of the will, and a(n) ________ who will care for any of his children under age ________.

A) trustees; attorney; executor; 18 B) heirs; executor; nanny; 16

C) heirs; attorney; guardian; 21 D) beneficiaries; executor; guardian; 18

E) heirs; attorney; guardian; 16

30) The purpose of a ________ trust is to reduce estate tax liability when one spouse predeceases the other.

A) Q-TIP B) revocable C) family D) sprinkling