Question 1

Lois,a 67-year-old,is receiving Social Security benefits.She received $25,000 in interest and dividends this year.Her Social Security benefits __________. ​

Accepted Answer

Social Security benefits are not reduced due to interest and dividend income, as they are not considered earned income.

Question 2

Marshall will need $1,250,000 in his retirement fund in 40 years at the time of his retirement.If Marshall can earn 8 percent annually over this period,how much does Marshall need to save annually to meet that goal? (Show all work.)

Accepted Answer

The answer of Marshall will need $1,250,000 in his retirement...

Question 3

The wage base on which Social Security tax is computed __________. ​

Accepted Answer

The wage base on which Social Security tax is computed increases each year. For example, in 2020, the wage base was $137,700, but in 2021 it increased to $142,800. This means that individuals earning above $142,800 in 2021 will not pay Social Security tax on any amount above that limit.

Question 4

Marcia works for Telephonic Industries and participates in its supplemental retirement plan.In years when the firm has no profit,the firm is not required to contribute to the supplemental retirement plan.This plan is a __________. ​

Accepted Answer

A profit-sharing plan is a type of retirement plan where contributions are made based on the company's profits. If there are no profits, the company is not required to contribute, which aligns with the description given.

Question 5

Harry starts receiving reduced retirement benefits at age 62.These benefits __________. ​

Accepted Answer

When Harry reaches the normal retirement age, his reduced benefits will increase to the full benefit amount he is entitled to.

Question 6

Danielle puts 8 percent of her paycheck in a 401(k)plan administered by her employer.Danielle earns $55,000 per year and is in the 28 percent tax category.What annual tax savings does she get from her contribution? If her employer matches contributions on the first 5 percent of her salary dollar for dollar and the next 3 percent with 50 cents for every dollar,how much will her employer put into her account this year? (Show all work.)

Accepted Answer

The answer of Danielle puts 8 percent of her paycheck...

Question 7

Contributions are made in after-tax dollars to __________. ​

Accepted Answer

Roth 401(k) plans are the only option listed that take after-tax contributions. The benefit of a Roth 401(k) is that the withdrawals in retirement are tax-free, whereas traditional 401(k) and IRA withdrawals are taxed as income. Additionally, Roth 401(k) plans do not have income limits, unlike Roth IRAs.

Question 8

Kurt receives Social Security benefits and also received $55,000 in wages during the year.His Social Security benefits are __________. ​

Accepted Answer

Social Security benefits may be partially taxable depending on an individual's income. In Kurt's case, with $55,000 in wages, a portion of his Social Security benefits will likely be subject to taxation.

Quiz 14: Planning for Retirement

Lois,a 67-year-old,is receiving Social Security benefits.She received $25,000 in interest and dividends this year.Her Social Security benefits __________. ​

Marshall will need $1,250,000 in his retirement fund in 40 years at the time of his retirement.If Marshall can earn 8 percent annually over this period,how much does Marshall need to save annually to meet that goal? (Show all work.)

The wage base on which Social Security tax is computed __________. ​

Marcia works for Telephonic Industries and participates in its supplemental retirement plan.In years when the firm has no profit,the firm is not required to contribute to the supplemental retirement plan.This plan is a __________. ​

Harry starts receiving reduced retirement benefits at age 62.These benefits __________. ​

Contributions are made in after-tax dollars to __________. ​

Kurt receives Social Security benefits and also received $55,000 in wages during the year.His Social Security benefits are __________. ​

Lois,a 67-year-old,is receiving Social Security benefits.She received $25,000 in interest and dividends this year.Her Social Security benefits __________.

The wage base on which Social Security tax is computed __________.

Marcia works for Telephonic Industries and participates in its supplemental retirement plan.In years when the firm has no profit,the firm is not required to contribute to the supplemental retirement plan.This plan is a __________.

Harry starts receiving reduced retirement benefits at age 62.These benefits __________.

Contributions are made in after-tax dollars to __________.

Kurt receives Social Security benefits and also received $55,000 in wages during the year.His Social Security benefits are __________.