If the replacement-ratio approach is used to determine the amount of income needed to fund the desired retirement lifestyle of a client, all the following would be logical factors to consider, EXCEPT:

(A) Clients expectations for increasing his or her standard of living

(B)Clients expectations for keeping pace with inflation

(C)Clients current salary

(D)Clients current expenses

In 2020, Chip, an accomplished professional race car driver, is to receive a signing bonus for agreeing to drive for Hot-Lap International, a racing team. Hot-Lap agrees to establish a NQDC agreement with Chip to defer the bonus beyond Chips peak income producing years. Hot-Lap transfers the bonuses to an escrow agent, subject to the risk of forfeiture to team creditors in bankruptcy, who invests the funds in securities acting as a hedge against inflation. The bonus is deferred until 2021 and is then paid to Chip in years 2021-2030. When is the income deductible by the employer and includible by Chip?

Option	Employer Deduction	Employee Inclusion
A	2020	2020
B	2021	2021
C	2021-2030	2021
D	2021-2030	2021-2030

A) Option A.

B) Option B.

C) Option C.

D) Option D.

Which of the following is(are) required for an investment advisor to be deemed a fiduciary under ERISAs renders investment advice definition? 1. The investment advisor renders advice pursuant to an agreement. 2. The investment advisor is paid for the advice provided. 3. The investment advisor has influence approaching control over the plans investment decisions. 4. The investment advisor affirmatively elects to be a fiduciary.

A) 2.

B) 1 and 3.

C) 1, 2, and 3.

D) 1, 2, 3, and 4.

For the year 2020, Katy (age 35) and Stefen (age 38), a married couple, reported the following items of income:

	Katy	Stefen	Total
Wages	$50,000	-	$50,000
Dividend Income	$2,000	$1,200	$3,200
Cash won from lottery		$500	$500
	$52,000	$1,700	$53,700

Katy is covered by a qualified plan. Stefen does not work; he makes his own wine and samples it most of the day. Assuming a joint return was filed for 2020, what is the maximum tax deductible amount that they can contribute to their IRAs?

A) $2,500.

B) $6,000.

C) $7,500.

D) $12,000.

Which of the following statements regarding EGTRRA 2001 is false?

A) EGTRRA 2001 increased the employers deductible contribution limit for profit sharing plans to 25 percent of employer compensation.

B) After the enactment of EGTRRA 2001, money purchase pension plans adoptions have increased.

C) Many Tandem Plans were terminated and/or converted after the enactment of EGTRRA 2001.

D) Prior to EGTRRA 2001, an employer could deduct contributions to a money purchase pension plan up to 25 percent of employer covered compensation.

Which of the following qualified plans require mandatory funding? 1. Defined.benefit.pension.plans. 2. 401(k) plans with an employer match organized as a profit sharing plan. 3. Cash.balance.pension.plans. 4. Money purchase pension plans.

A) 1 and 3.

B) 1, 2, and 3.

C) 1, 3, and 4.

D) 1, 2, 3, and 4.

If the owner of a closely held corporation wants to retire and transfer a business to his children but needs income from the business during retirement, which of the following strategies will most likely be effective for maintaining family harmony following a transfer of interests in the business?

(A) The owner should give equal amounts of stock to all children.

(B) The owner should sell his shares to children who want to work in the business and buy life insurance for the other children.

(C) The owner can restructure the corporation to have voting and non-voting stock and give the non-voting stock to the children.

(D) The owner can sell the business to those children who want to be owners and leave equal inheritances to all children.

All of the following distribution options may be available from qualified plans EXCEPT:

(A) Discretionary withdrawals

(B) In service withdrawals after age 60

(C) Lump sum payment

(D) Installment payments

Which of the following statements concerning target date mutual funds is correct?

(A) Asset allocations by these funds are made on the basis only of time horizon.

(B) Asset allocations for target funds with the same target must be the same.

(C) Asset allocations will change in these funds as retirement approaches.

(D) Asset allocations for these funds will change as the market conditions change.

All the following are advantages for wealthier clients of converting a traditional IRA to a Roth IRA, EXCEPT:

(A)If estate taxes are paid from the Roth IRA, the tax benefits of conversion are increased.

(B)No minimum distributions are required from the Roth IRA during the owners lifetime.

(C)If a spouse is the beneficiary of the Roth IRA, no minimum distributions are required during the spouses lifetime.

(D)The tax-deferred growth can extend for more years with the Roth IRA than with a traditional IRA.

For a purchaser of an annuity, all the following statements concerning the selection of an appropriate type of annuity are correct, EXCEPT:

(A)A straight life annuity provides greater monthly dollar payments than a life annuity with a period certain.

(B)A 100% joint and survivor annuity will provide a larger benefit than a 50% joint and survivor benefit.

(C)A father would use a period certain if he wanted benefits to continue at least until his 15-year-old son turns 25.

(D)A life annuity with 10 years certain will provide larger benefits than a life annuity with 20 years certain.

The Morgan Chemical Company wants to adopt a qualified plan that will reward its key employees who earn high salaries and who have been with the company for many years. The company would like to provide a retirement benefit that replaces 50% of income for employees with 25 years of service. Which kind of benefit formula would be most appropriate?

(A) A unit-benefit formula that accounts for past service

(B) A flat-amount-per-year-of-service formula

(C) A flat-percentage-of-earnings formula

(D) A flat-amount formula