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Qualified Plan Contributions
Course: Retirement PlanningLesson 2: Qualified Plan Advantages and Disadvantages for Employees and Business Owners Student Question: I understand below is an example, but it is possible to contribute $20k to a retirement fund like a Roth IRA? I thought the limit was $6k. Example:Acme, Inc. contributed $20,000 to Tarzan Smith’s qualified plan in Year 1. Tarzan will never pay Social Security tax or Medicare tax on the $20,000 employer contribution;…
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Defined Benefit Pension Plans – Actuarial Assumptions
Which of the following statements concerning the various actuarial assumptions used in estimating an employer’s contributions to a defined benefit pension plan is correct? The higher the assumed rate of investment income, the larger the employer’s assumed contribution rate. The higher the employee turnover or termination rate, the larger should be the employer’s assumed contribution…
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Corona Virus Impacts CFP Board Exam
CFP Board COVID19 Updates The most recent CFP Board guidance for those planning to take the CFP Board Exam in 2020 follows: “MARCH 2020 CFP® EXAM COVID-19 impacted hundreds of candidates planning to sit for the March 2020 exam. Some early test site closures were announced early in the March 10-17 testing window, followed by…
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Social Security Retirement Benefits
Course: Insurance PlanningLesson 10: Social Security Student Question: This question (below) doesn’t quite make sense to me. Could you clarify why the correct answer is D? Robin Elizabeth qualifies for a retirement benefit of $250 and a spouse’s benefit of $400. At her full retirement age, she will receive which of the following? Both $250 and $400. The higher of…
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OASDI Disability Income Benefits
Which of the following statements concerning OASDI disability income benefits is correct? Disability is defined as the inability to perform all major duties of the insured’s own occupation. Unless specifically exempted, a waiting period of 12 months must be satisfied. If the disabled worker is also receiving workers compensation benefits, the full OASDI benefit is…
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The Stretch IRA Is Not Dead For Everyone
Eligible Designated Beneficiary What exactly does it mean to be an “eligible designated beneficiary” of a Traditional IRA? Here is the short answer – an eligible designated beneficiary is exempt from the now-infamous stretch IRA killer known as the 10-year distribution rule. For IRA owners dying in or after 2020, the 10-year distribution rule kills…
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Required Insurance Penalty and Reimbursement
Course: Insurance PlanningLesson 6: Commercial Property and Liability Insurance Student Question: Hi Dan – On this review page, the correct answer for Question 2 (below) indicates that insurance will pay only over 97% of replacement cost. However, it says in the chapter that as long as the property is insured for more than 80% of replacement cost, the policy will pay the full cost…
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Retirement Funding Calculation
Erika wants $50,000 a year in today’s dollars in retirement. She anticipates retiring in 10 years and living in retirement for 30 years. Erika can earn 7% on her investments and she expects inflation to average 4%. Approximately how much should Erika have saved by the day she retires to meet this goal? $913,000 $983,000…
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Surrender Cost Index
Course: Insurance PlanningLesson 14: Purchasing and Pricing Life Insurance Student Question: The surrender cost index is so confusing in terms of what I need to know. And could you provide a definition for the annuity due factor? Matt Instructor Response: HI Matt, This can be confusing. Let’s take a full step back for perspective. The purpose of the Surrender Cost Index is…
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