Deck 14: Starting Early: Retirement and Estate Planning

Question 1

Your retirement will last only about 15 years.

Answer 1

False

Question 2

Only saving now and curtailing current spending can ensure comfortable retirement later.

Answer 2

True

Question 3

Be certain you don't let your 45^th birthday roll by without a comprehensive retirement plan.

Answer 3

True

Question 4

In reviewing your assets for retirement,you should increase premium payments by increasing the face value of your life insurance.

Question 5

The ground rules for retirement planning are fast changing.

Question 6

In a reverse annuity mortgage,a lender uses your house as collateral to buy an annuity for you from a life insurance company.

Question 7

Your net worth is equal to your assets minus liabilities.

Question 8

Saving just a little bit today for your retirement won't help.

Question 9

Your spending patterns during retirement will probably not change.

Question 10

At age 65,the life expectancy of a man is 7 years.

Question 11

The exact amount of money you will need in retirement cannot be predicted accurately.

Question 12

You can expect to spend about 16 to 20 years in retirement.

Question 13

It is vital to engage in basic retirement planning activities through your working years.

Question 14

Your first step in retirement planning is to analyze your current assets and liabilities.

Question 15

At age 65,the life expectancy of a woman is 13 years.

Question 16

The exact amount of money you will need in retirement can be predicted accurately.

Question 17

Your current assets include everything you own that has value.

Question 18

At age 65,the life expectancy of a man is 14 years.

Question 19

Some experts suggest starting estate planning while you are still in school.

Question 20

During your retirement,your employer's health insurance plan and provincial health insurance will cover your medical expenses.

Question 21

You can qualify for reduced CPP retirement benefits at age 50.

Question 22

The housing needs of people do not change much as they grow older.

Question 23

The contribution you are required to make to the CPP is fixed.

Question 24

Be certain you don't let your ____________ birthday roll by without a comprehensive retirement plan.

A) 25^th
B) 35^th
C) 55^th
D) 45^th
E) 65^th

Question 25

Federal programs are the major source of public retirement pensions.

Question 26

The Canada Pension Plan (CPP)includes disability,retirement,and survivor benefits.

Question 27

In an RRSP,contributions are tax-deductible and earnings accumulate tax free.

Question 28

Annuities are meant to provide retirement income in much the same way as a salary provides regular income.

Question 29

Even if it is a life annuity,payments cannot continue until death.

Question 30

Which one(s)of the following is(are)misconceptions about retirement planning?

A) My expenses will drop when I retire.
B) My retirement will last only 15 years.
C) I can depend on government benefits.
D) I can depend on my company pension.
E) My expenses will drop when I retire,my retirement will last only 15 years,I can depend on government benefits,and my company pension are misconceptions.

Question 31

Unless it is indexed,an annuity provides no protection from inflation.

Question 32

Your expenses for leisure activities will probably increase during retirement.

Question 33

An employee whose pension has not vested will lose all contributions to her pension plan if she transfers to a new employer.

Question 34

Staying in their present home is the alternative preferred by most of the persons who are approaching retirement.

Question 35

There are hardly any psychological benefits of working part-time during your retirement.

Question 36

Which statement is correct about retirement planning of young professionals?

A) They don't want to retire with plenty of money.
B) They would rather save money now for retirement than spend it.
C) They are not worried about having enough money to retire comfortably.
D) Young people are in the best position to save.
E) Saving money does not come naturally to many young people.

Question 37

How many years can you expect to spend in retirement?

A) 1 to 5 years
B) 6 to 10 years
C) 10 to 12 years
D) 12 to 16 years
E) up to 16 to 20 years

Question 38

You can qualify for reduced CPP retirement benefits at age 60.

Question 39

The first step in stretching your retirement income is to make sure you are receiving all the income to which you are entitled.

Question 40

Which one of the following is a true statement about retirement planning?

A) I should update my retirement plan periodically.
B) My pension benefits will increase to keep pace with inflation.
C) Saving just a little bit won't help.
D) My employer's health insurance plan will cover my medical expenses.
E) Medicare will cover my medical expenses.

Question 41

At age 65,what is the average life expectancy of a woman?

A) 13 years
B) 16 years
C) 19 years
D) 11 years
E) 9 years

Question 42

Which housing alternative is preferred by most persons who are approaching retirement?

A) house sharing
B) ECHO unit
C) accessory apartment
D) present home
E) boardinghouse/rooming house

Question 43

When you are nearing retirement,it is a good idea to:

A) increase the face value of your life insurance.
B) increase your property insurance coverage.
C) keep your life insurance intact.
D) decrease the face value of your life insurance.
E) swap your old life insurance policy with a new one.

Question 44

Which one of the following expenditures for retirees is likely to decrease?

A) food and medical care
B) federal income taxes
C) expenses for leisure activities
D) medical expenses
E) insurance

Question 45

Your first step in retirement planning is to:

A) estimate your spending needs.
B) analyze your current assets and liabilities.
C) adjust your spending needs for inflation.
D) evaluate your planned retirement income.
E) determine if you'll have to work during retirement.

Question 46

Which one(s)of the following is(are)tips from retirement specialists on how to uncover hidden taxes and other costs of a retirement area?

A) Contact the local Chamber of Commerce to get an economic profile.
B) Contact the provincial tax department to find out provincial,sales,and inheritance taxes.
C) Call a local accountant to find out which taxes are rising.
D) Rent for a while instead of buying immediately.
E) Contact the local Chamber of Commerce to get an economic profile,contact the provincial tax department to find out provincial,sales,and inheritance taxes,call a local accountant to find out which taxes are rising,and rent for a while instead of buying immediately are correct.

Question 47

When a lender uses your house as collateral to buy an annuity for you from a life insurance company,it is called:

A) an obverse annuity mortgage.
B) mortgage life insurance.
C) a reverse mortgage annuity.
D) a fixed annuity with level premium.
E) whole life insurance.

Question 48

At age 65,what is the average life expectancy of a man?

A) 4 years
B) 7 years
C) 9 years
D) 12 years
E) 14 years

Question 49

Many people make the move into retirement housing without:

A) considering seasonal factors.
B) experiencing many obstacles.
C) a spouse or companion.
D) doing enough research.
E) the proper accommodations.

Question 50

The people who are in the best position to save are:

A) middle-aged.
B) young adults in their 20s.
C) people in their 30s.
D) teenagers.
E) elderly.

Question 51

Which of these statements is correct about the Canada Pension Plan (CPP)?

A) The CPP dates back to 1996.
B) There are three types of CPP benefits.
C) CPP contribution is based on your age.
D) The federal government matches the CPP contributions of self-employed individuals.
E) If you can begin receiving your CPP benefits at the age of 50.

Question 52

Possible sources of income for many retirees include

A) government benefits.
B) public pension plans.
C) employer pension plans.
D) personal retirement plans and annuities.
E) government benefits,public pension plans,employer pension plans,personal retirement plans and annuities are possible sources of income.

Question 53

According to most financial planners,you will need about _____ percent of your current pre-tax income to maintain your standard of living in retirement.

A) 50
B) 60
C) 70
D) 80
E) 90

Question 54

You can get a reverse mortgage annuity if:

A) you are at least 55 years old.
B) you are five years from retirement.
C) your mortgage is largely or completely paid off.
D) you are recently retired.
E) you need a loan.

Question 55

Which type of housing is designed to allow people to stay in their homes as they grow older?

A) Accessory apartment
B) ECHO unit
C) Rooming house
D) universal design
E) professional companionship arrangement

Question 56

A(n)____________ is appealing because it allows people to stay in their homes as they grow older and frail.

A) accessory apartment
B) caretaker arrangement
C) commercial rental
D) universal design home
E) congregate housing

Question 57

Which statement is correct regarding retirement living expenses?

A) It is impossible to estimate your spending needs.
B) The exact amount of money you'll need is impossible to predict.
C) You'll use a smaller amount of money for food,housing,and medical care.
D) Your spending patterns will probably not change.
E) The exact amount of money you'll need can be accurately predicted.

Question 58

Some retirement planning experts suggest that you start retirement planning while you are:

A) in school.
B) in college.
C) in graduate school.
D) middle-aged.
E) still employed.

Question 59

Which one of the following expenditures for retirees is likely to increase?

A) insurance
B) federal income taxes
C) clothing expenses
D) work-related expenses
E) provincial income taxes

Question 60

You can determine your net worth by

A) subtracting your assets from your liabilities.
B) subtracting the value of your home from the mortgage balance.
C) adding your liabilities and assets.
D) subtracting your liabilities from your assets.
E) subtracting your expenses from your income.

Question 61

To stretch your income during retirement,you could

A) skip leisure activities.
B) cut your food expenditures.
C) cancel your life and property insurance.
D) use your skills and time instead of your money.
E) not travel.

Question 62

What types of housing options are available to retirees?

Question 63

How can retirees avoid housing traps?

Question 64

Which of the following is not a public pension plan in Canada?

A) CPP
B) QPP
C) OAS
D) RRSP
E) ETA

Question 65

If a retiree wishes a predictable income in retirement,at the age of 69 she should transfer her RRSP into a(n)_______________.

A) RRIF
B) Annuity
C) Mutual fund
D) Cash
E) GIC

Question 66

Which employer pension plan has an individual account for each employee?

A) undefined-contribution plan
B) defined-contribution plan
C) defined-benefit plan
D) undefined-benefit plan
E) surplus-employee plan

Question 67

An employee who is seeking the greatest security in her pension income would choose which of the following?

A) Deferred Profit Sharing Plan (DPSP)
B) Defined Contribution Pension Plan (DCPP)
C) Group Registered Retirement Savings Plan (Group RRS))
D) Defined Benefit Pension Plan (DBPP)
E) Dividend Reinvestment Plan (DRIP)

Question 68

Over the last two decades,companies have switched their retirement plans from ______________ to _____________.

A) RPPs,GRRSPs
B) DPSPs,defined-benefits
C) defined benefits,defined contributions
D) defined contributions,defined benefits
E) DPSPs,defined contributions

Question 69

Which employer retirement plan specifies the benefits promised to the employee at the normal retirement age?

A) defined-contribution plan
B) undefined-contribution plan
C) undefined-benefit plan
D) defined-benefit plan
E) surplus-employee plan

Question 70

Which of the following statements is false?

A) Payments for a life annuity can continue until death.
B) Transfers between annuity companies are tax-free.
C) Annuities are legitimate tax shelters.
D) An annuity has no investment limit.
E) Annuities provide opportunities for retirement income to grow.

Question 71

One of the following is not an advantage of the Canada Pension Plan retirement income:

A) earned income partially offsets benefits.
B) forced savings.
C) portable from job to job.
D) cost shared with employer.
E) survivorship rights.

Question 72

What types of retirement living expenses can be lowered or eliminated?

Question 73

The first step in stretching your retirement income is to make sure that you are

A) contributing to the CPP.
B) covered by an employer pension plan.
C) contributing to a RRIF.
D) saving funds in a RRSP.
E) receiving all of the income to which you are entitled.

Question 74

Which of the following requires mandatory contributions from workers earning in excess of $3,500 a year?

A) Quebec Pension Plan (QPP)
B) Old Age Security (OAS)
C) Defined Benefit Pension Plan (DBPP)
D) Registered Retirement Savings Plan (RRSP)
E) Dividend Reinvestment Plan (DRIP)

Question 75

What is the most popular personal retirement plan?

A) Deferred Profit Sharing Plan
B) Registered Pension Plan
C) Registered Retirement Savings Plan
D) Canada Pension Plan
E) New Seniors Benefit

Question 76

What types of expenses might increase during retirement?

Question 77

Why is it important to review your assets and liabilities before your retirement?

Question 78

What are important steps in retirement planning?

Question 79

What is the importance of retirement planning?

Question 80

An annuity in which you receive an income for the rest of your life,but no payments are made to anyone after your death is called:

A) fixed-term annuity.
B) life annuity.
C) installment refund annuity.
D) Registered Retirement Income Fund.
E) money purchase pension plan