#1
What is the primary goal of financial planning for retirement?
Accumulating wealth
Maximizing current income
Minimizing taxes
Ensuring a comfortable retirement
#2
Which of the following is considered a guaranteed source of retirement income provided by an employer?
Social Security
Pension
401(k)
IRA
#3
Which investment strategy involves spreading investments across different asset classes to reduce risk?
Concentration
Diversification
Leveraging
Speculation
#4
Which insurance product provides coverage for damage to your own vehicle in the event of an accident?
Health insurance
Life insurance
Auto insurance
Homeowners insurance
#5
What is the primary purpose of a will in estate planning?
Naming beneficiaries for retirement accounts
Distributing assets after death
Managing investment risk
Providing health care directives
#6
What is the purpose of a 529 plan in financial planning?
Providing retirement income
Saving for college education
Creating a trust fund
Funding charitable donations
#7
Which type of insurance provides coverage for a specific period and pays a death benefit if the insured dies during that period?
Term life insurance
Whole life insurance
Variable life insurance
Universal life insurance
#8
What is the 4% rule in retirement planning?
Investing 4% of retirement savings in stocks
Withdrawing 4% of retirement savings annually for income
Allocating 4% of retirement savings to insurance
Contributing 4% of income to retirement accounts
#9
In retirement planning, what does the term 'sequence of returns risk' refer to?
The order in which investment returns occur
The risk of losing all retirement savings
The timing of Social Security payments
The annual percentage rate of return
#10
What is the penalty for early withdrawal from a traditional IRA before the age of 59½?
#11
What is the purpose of disability insurance in financial planning?
Providing income in retirement
Replacing lost income due to illness or injury
Offering tax-free withdrawals
Ensuring a fixed retirement income
#12
Which investment option typically offers a fixed interest rate and guarantees the return of principal?
Stocks
Bonds
Mutual funds
Certificate of deposit (CD)
#13
Which retirement account allows for tax-free withdrawals if certain conditions are met and is often used for medical expenses?
401(k)
Traditional IRA
Roth IRA
Pension plan
#14
What is the purpose of long-term care insurance in retirement planning?
Providing income in retirement
Covering medical expenses during retirement
Ensuring a fixed retirement income
Protecting against the costs of extended care services
#15
What is the purpose of an annuity in retirement planning?
Providing health insurance
Offering life insurance coverage
Generating a stream of income for life
Managing investment risk
#16
What is the purpose of a Roth 401(k) in retirement planning?
Providing tax-free withdrawals in retirement
Offering employer-sponsored health coverage
Allowing early withdrawals without penalties
Investing in high-risk securities
#17
Which factor is considered in determining the life insurance premium for an individual?
Number of dependents
Credit score
Marital status
Age and health condition
#18
What is the purpose of a revocable living trust in estate planning?
Avoiding probate
Naming beneficiaries for retirement accounts
Providing health care directives
Managing investment risk