T F 1. According to a recent American College study, the highest priority retirement objective of clients appears to be the maintenance of their preretirement standard of living.
(2.4)

T F 2. For most individuals who wait until age 55 or 60 to begin, it is already too late to do any meaningful retirement planning.
(2.5)

T F 3. One of the biggest roadblocks to retirement planning is the tendency of many working people to use their entire aftertax income to support their current standard of living.
(2.5)

T F 4. A given amount of money set aside for retirement purposes during the early years of one’s working life can produce a much larger fund at retirement date than the same amount set aside during the later years.
(2.5–2.6)

T F 5. The replacement ratio method of retirement planning assumes that the standard of living during the years immediately prior to retirement is largely irrelevant.
(2.9)

T F 6. For most clients the retirement planner can correctly assume that their total federal taxes per year will be lower during the retirement years than during the preretirement years.
(2.9–2.10)

T F 7. Generally the expense method of retirement planning yields more precise answers for young clients than for clients who are close to retirement.
(2.10–2.11)

T F 8. In order to do an effective job of retirement planning for a client, the financial services professional must consider the effect of inflation during both the preretirement and postretirement years.
(2.12)

T F 9. One of the advantages of a qualified plan is that the employee pays a tax currently on employer contributions, thus getting the tax bill on them out of the way early.
(2.16)

T F 10. If investment results in a defined-contribution plan are unfavorable, it is the employee who suffers the loss.
(2.18)

T F 11. The following is an example of a unit-benefit formula in a defined-benefit pension plan:

(2.20)

T F 12. A target-benefit pension plan is a type of defined-benefit plan.
(2.21)

T F 13. In a typical money-purchase pension plan the employer’s annual contributions are mandatory and are based on a percentage of the participants’ compensation.
(2.21)

T F 14. Lump-sum distributions from a nonqualified deferred-compensation plan are subject to significantly higher federal income taxes than similar distributions from a qualified plan.
(2.28–2.29)

T F 15. Retirement benefits under the social security program provide a proportionately larger benefit relative to salary for high-income workers than for low-income workers.
(2.30)

T F 16. The hospital portion of medicare, part A, is available at no monthly cost to anyone aged 65 or older who is entitled to receive monthly social security retirement benefits.
(2.30)

T F 17. Anyone eligible to participate in part A of the medicare program is also eligible to participate free of charge in part B of the program.
(2.31)

T F 18. Although the part B benefits in the medicare program are quite broad, there are nonetheless many medical products and services that are not covered.
(2.32)

T F 19. A one-time exclusion of up to $125,000 of gain from the sale of a home is available to taxpayers aged 55 or older.
(2.33)