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In a "qualified tax-deferred" retirement plan, taxes are deferred on
A) only employer contributions.
B) only interest earned by the retirement fund.
C) employer contributions and interest earned by the retirement fund.
D) only employee contributions
Tax-deferred retirement plans
A) are generally preferred for most individuals because they accumulate returns at a pre-tax rate.
B) are generally preferred because they are safer, having received IRS approval.
C) are only tax advantageous for those at the highest marginal tax bracket.
D) are no better than non-tax-deferred plans, because the taxes must eventually be paid.
When a pension plan satisfied all the government mandated requirements for it to receive a tax advantaged status, it is referred to as a
A) defined benefit plan.
B) qualified retirement plan.
C) individual savings plan.
D) normal retirement plan
A "qualified" retirement plan is one that
A) has fully vested benefits.
B) is currently paying out benefits.
C) is federally insured.
D) has a special tax status because it satisfies all government-mandated requirements.
Company-sponsored pension plans are regulated by
A) the Old-Age, Survivors, Disability, and Health Insurance Act (OASDHI).
B) the Employee Retirement Benefit Act (ERBA).
C) the Retirement Accounting Standards Board (RASB).
D) the Employee Retirement Income Security Act (ERISA).
Saving for retirement is different from most other forms of saving,
A) because it need not be placed in diversified investments.
B) because such savings can be placed in more liquid investments and because it is accorded special tax status.
C) because of the special tax status accorded such savings.
D) because such savings can be placed in more liquid investments.
When deciding how much to save for your retirement years the author suggests you
A) save as much as you possibly can because the future is highly uncertain.
B) consult a professional planner to find out how much you must presently save.
C) carefully weigh the marginal benefit of an additional dollars worth of present consumption versus the marginal benefit of an additional dollars worth of consumption in your retirement years.
D) first take care of your present needs, because the future has a way of taking care of itself.
Most financial planners will advise you to begin retirement planning
A) as soon as you enter the work force.
B) when you are eligible for Social Security.
C) when you reach 30 years of age.
D) when you are ready to retire.
Life insurance proceeds can be directly assigned to beneficiaries, thus passing outside the will.
A) True
B) False
Irrevocable trusts can lower estate taxes, but may incur gift taxes.
A) True
B) False
Only the grantor of a trust can change the terms of an irrevocable trust.
A) True
B) False
A trust that can be changed by the grantor at any time is known as a revocable trust.
A) True
B) False
A trust specified in the will and taking effect at death is known as an inter vivos trust.
A) True
B) False
A trustee has a fiduciary responsibility to manage the trust in the best interests of the beneficiary.
A) True
B) False
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