CRPC EXAM PRACTICE EXAM -

CRPC EXAM PRACTICE EXAM -

QUESTIONS AND CORRECT ANSWERS (VERIFIED ANSWERS)

|ALREADY GRADED A+

Which one of the following reasons for premature distributions from qualified retirement plans does not avoid the 10% early withdrawal penalty? - ANSWER- Payment of income taxes

Which one of the following usually does not represent a possible retirement income source for people contemplating retirement? - ANSWER-Use assets

People generally - ANSWER-have not calculated the amount they will need for retirement.

As a retiring employee, Carla is slated to receive 3% of her average salary over her last three years with ABC Company times her years of service. Since her average salary during those last three years was $110,000 and she has put in 20 years of service, her annual retirement benefit will be - ANSWER-$66,000.

Non-Roth distributions from a qualified plan that are attributable to employer contributions are fully taxable in the year that the employee receives these distributions. Taxation can be reduced or delayed by which one of the following tactics? - ANSWER-Rolling over the benefits into an IRA

Assuming that John, age 55, can earn 6% on his investment, how much will he need to contribute to his IRA at the end of each year in order to accumulate $500,000 by the time he retires at age 65? - ANSWER-$37,934

Questions such as "Where do you want to live?", "What does retirement look like to you?", and "How do you see yourself spending time in retirement?" have to do primarily with which aspect of retirement planning? - ANSWER-Emotional preparedness.

CRPC EXAM PRACTICE EXAM -

QUESTIONS AND CORRECT ANSWERS (VERIFIED ANSWERS)

|ALREADY GRADED A+

Flexible retirement arrangements, including participating in a phased retirement plan, are appealing to employees - ANSWER-who are concerned about the abrupt transition to full-time retirement.

Labor markets are becoming friendlier to older workers for all of the following reasons except - ANSWER-employers can stop providing employee health benefits for employees on Medicare.

IRAs permit distributions without a 10% early withdrawal penalty in all of the following situations except - ANSWER-attainment of age 55.

COBRA - ANSWER-must provide continued coverage for 18 months (36 in certain situations).

Exceptions to the 10% early withdrawal penalty for distributions taken from a 401(k) prior to age 59 include all of the following except - ANSWER- distributions for a first-time home purchase, up to $10,000.

Tin parachutes apply to - ANSWER-middle-management employees.

All of the following apply to voluntary early retirement programs except - ANSWER-they should be analyzed based on their future value.

In-service withdrawals prior to age 62 are not permitted from which of the following? - ANSWER-Cash balance plans

The IRS permits hardship withdrawals from 401(k) plans in cases of "immediate and heavy financial need." Which of the following is not considered immediate and

CRPC EXAM PRACTICE EXAM -

QUESTIONS AND CORRECT ANSWERS (VERIFIED ANSWERS)

|ALREADY GRADED A+

heavy? - ANSWER-Payments to prevent defaulting on a mortgage for a vacation home

Before rolling assets from an employer sponsored plan to an IRA, one should consider which of the following? - ANSWER-all

Taxes may be deferred on a qualified plan distribution if it is rolled over to an IRA, TSA, SEP, governmental 457 plan, or to another qualified plan. All are true regarding rollovers except - ANSWER-they generally result in less money for retirement.

All of the following are disadvantages to performing an indirect rollover from a qualified plan to an existing IRA except - ANSWER-the entire distribution will be subject to immediate taxation.

Not all distributions from a qualified plan may be rolled over into a traditional IRA. Which one of the following distributions is an "eligible rollover distribution"?

• ANSWER-The vested cash balance in the plan

When must the designated beneficiary be determined in order to avoid having to distribute the full IRA balance under the five-year rule? - ANSWER-September 30 of the year following the participant's death.

Distributions from qualified plans, 403(b) plans, SEPs, SIMPLEs, and IRAs are assessed a 10% penalty if they are taken before age 59. There are exceptions to this rule. Which of the following is not an exception to this penalty? - ANSWER-The distribution is made to pay homeowners insurance.

CRPC EXAM PRACTICE EXAM -

QUESTIONS AND CORRECT ANSWERS (VERIFIED ANSWERS)

|ALREADY GRADED A+

Which of the following is not a step in determining the best plan distribution option? - ANSWER-Compare the options to what the plan may offer in the future

Once selected, beneficiaries of a qualified profit sharing plan can be changed - ANSWER-at any time.

Participant loans are permitted from - ANSWER-qualified plans and 403(b)s.

Which of the following statements is correct about qualified joint survivor annuities (QJSAs)? - ANSWER-All pension plans must offer QJSAs.

Which of the following events would result in income taxation to a plan participant? - ANSWER-The participant takes a distribution from a qualified plan and rolls it over into an IRA 75 days later.

The funds from a 403(b) plan may be rolled over into all of the following except - ANSWER-a nongovernmental 457 plan.

Jeffrey died after beginning his required minimum distribution payments. He has named his daughter, age 48, as the sole beneficiary of his IRA. Which one of the following statements is correct regarding her options for this IRA according to the SECURE Act? - ANSWER-As a designated beneficiary she must distribute the full account balance within 10 years.

To remain qualified, pension plans must prohibit in-service withdrawals until employees reach age - ANSWER-62