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Chapter Quiz
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1
All of the following are myths about your retirement years EXCEPT:
A)You will have fewer expenses.
B)Social Security will cover all your expenses.
C)Inflation will erode the value of your retirement savings.
D)You have plenty of time to start saving for retirement.
2
Which of the following spending categories will likely increase during retirement?
A)Transportation
B)Clothing
C)Food
D)Medical care
3
The difference between a defined-contribution pension plan and a defined-benefit pension plan is that:
A)In a defined-contribution plan the employer contributes a specified amount to an individual account for each employee and a defined benefit plan specifies how much the employee’s benefit will be upon retirement.
B)In a defined-benefit plan the employer contributes a specified amount to an individual account for each employee and a defined-contribution plan specifies how much the employee’s benefit will be upon retirement.
C)With a defined contribution plan the employee requests a specified amount that the employer contributes and a defined benefit plan the employee requests a specific monthly payment to be made during retirement.
D)With a defined benefit plan the employee requests a specified amount that the employer contributes and a defined contribution plan the employee requests a specific monthly payment to be made during retirement.
4
Your Social Security benefits are dependent on:
A)Your spouse's retirement savings
B)What age you retire and your earnings before retirement.
C)Your private retirement savings
D)How much your employer contributed to the fund.
5
The age in which you must be withdrawing money from your private retirement accounts, like an IRA is:
A)59 and a half
B)65
C)70 and a half
D)67
6
An estate is
A)Belongings of the rich and elderly
B)The debts of a deceased person.
C)The debts of anyone dead or alive.
D)Everything one owns.
7
The recipient of your estate after you death is called:
A)A dependent
B)A beneficiary
C)A widow
D)A lawyer
8
A living will is different from a will in that:
A)A living will states what your wishes are for medical treatment should you be unable to make those decisions and a will specifies how your estate is divided between your beneficiaries.
B)A will states what your wishes are for medical treatment should you be unable to make those decisions and a living will specifies how your estate is divided between your beneficiaries.
C)A living will changes as your life circumstances change and a will does not change at all.
D)A will can be changed as your life circumstances change and a living will does not change at all.
9
A benefit of setting up a trust is that it:
A)Decreases your liabilities.
B)Allows your estate to go into probate
C)Provides income to your beneficiaries.
D)Increases the amount of your assets.
10
The tax that beneficiaries pay to the state when they receive an estate is called:
A)An estate tax
B)An estate and trust federal income tax
C)A gift tax
D)An inheritance tax.





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