51. The amount of money in your defined contribution retirement portfolio will d

Question

51. The amount of money in your defined contribution retirement portfolio will depend on
a. the age at which you begin contributing.
b. the amount of money you deposit each month.
c. the rate of return on your savings.
d. all of these.
e. none of these really make much difference.


____ 52. Lillian has a defined benefit plan that promises an annual retirement benefit based on the average of her last three years of salary times 2 times years of service. At retirement Lillian has 15 years of service and an average salary over the last 3 years of $65,000. What will her annual benefit be?
a. $65,000
b. $50,500
c. $35,400
d. $19,500
e. cannot determine


____ 53. Employee contributions to ____ plans do not reduce taxable income.
a. 403(b)
b. Thrift and savings
c. 457
d. 401(k)
e. a, b, and c


____ 54. If you work nine years under the social security system, you are
a. fully insured.
b. partially insured.
c. privately insured.
d. currently insured.
e. uninsured.


____ 55. Employer matching contributions are common with ____ plans.
a. 401(k)
b. 403(b)
c. 457
d. a and b
e. a and c


____ 56. Jacque Solis (age 38) is leaving her current job and would like to take a long vacation before starting new employment. She has $58,000 in a qualified plan that she would like to live on during this period. If she is in a 25 percent marginal tax bracket, how much will she have left after paying taxes and penalties?
a. $58,000
b. $43,500
c. $37,700
d. $29,000
e. $14,500


____ 57. Sally and Patrick are married with 4 young children. Patrick stays at home with the kids while Sally works as CEO of a small manufacturing firm earning $105,000 annually. Sally is covered by a 401(k) plan at work, but they would like to maximize their IRA contributions as well. Which of the following are true assuming their AGI is $105,897?
a. Sally and Patrick could each contribute $3,000 to a Roth IRA.
b. Sally and Patrick could each contribute $3,000 to a deductible traditional IRA.
c. Only Sally can contribute to any type of IRA. Patrick has no earned income.
d. Patrick could contribute $3,000 to either a deductible tradition IRA or a Roth IRA.
e. a and d


____ 58. An investment vehicle that systematically pays out benefits over an extended period of time is a(n)
a. common stock.
b. bonds.
c. mutual funds.
d. annuity.
e. money market securities.


____ 59. The two ways to buy annuities are single premium and
a. multi-premium.
b. future premium.
c. installment premium.
d. guaranteed premium.
e. lateral premium.


____ 60. You will receive the largest monthly payment under an annuity contract when the selected payment option is the
a. life annuity with no refund.
b. life annuity, period certain.
c. refund annuity.
d. annuity certain.
e. temporary life annuity.

Explanation / Answer

51. d. all of these. 52. d. $19,500 53. d. 401(k) 54. 55. d. a and b 56. b. $43,500 57. c. Only Sally can contribute to any type of IRA. Patrick has no earned income. 58. c. mutual funds. 59. c. installment premium. 60. b. life annuity, period certain. please rate

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