CRPC EXAM PRACTICE EXAM ACTUAL EXAM 400 QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS) |ALREADY GRADED A+
CRPC EXAM PRACTICE EXAM 2023-2024 ACTUAL
EXAM 400 QUESTIONS AND CORRECT DETAILED
ANSWERS WITH RATIONALES (VERIFIED ANSWERS)
|ALREADY GRADED A+
Which one of the following reasons for premature distributions from
qualified retirement plans does not avoid the 10% early withdrawal
penalty? – ANSWER- Payment of income taxes
Which one of the following usually does not represent a possible
retirement income source for people contemplating retirement? –
ANSWER- Use assets
People generally – ANSWER- have not calculated the amount they will
need for retirement.
As a retiring employee, Carla is slated to receive 3% of her average
salary over her last three years with ABC Company times her years of
service. Since her average salary during those last three years was
$110,000 and she has put in 20 years of service, her annual retirement
benefit will be – ANSWER- $66,000.
Non-Roth distributions from a qualified plan that are attributable to
employer contributions are fully taxable in the year that the employee
receives these distributions. Taxation can be reduced or delayed by
which one of the following tactics? – ANSWER- Rolling over the
benefits into an IRA
Assuming that John, age 55, can earn 6% on his investment, how much
will he need to contribute to his IRA at the end of each year in order to
accumulate $500,000 by the time he retires at age 65? – ANSWER-
$37,934
Questions such as “Where do you want to live?”, “What does retirement
look like to you?”, and “How do you see yourself spending time in
retirement?” have to do primarily with which aspect of retirement
planning? – ANSWER- Emotional preparedness.
Flexible retirement arrangements, including participating in a phased
retirement plan, are appealing to employees – ANSWER- who are
concerned about the abrupt transition to full-time retirement.
Labor markets are becoming friendlier to older workers for all of the
following reasons except – ANSWER- employers can stop providing
employee health benefits for employees on Medicare.
IRAs permit distributions without a 10% early withdrawal penalty in all
of the following situations except – ANSWER- attainment of age 55.
COBRA – ANSWER- must provide continued coverage for 18 months
(36 in certain situations).
Exceptions to the 10% early withdrawal penalty for distributions taken
from a 401(k) prior to age 59 include all of the following except –
ANSWER- distributions for a first-time home purchase, up to $10,000.
Tin parachutes apply to – ANSWER- middle-management employees.
All of the following apply to voluntary early retirement programs except
- ANSWER- they should be analyzed based on their future value.
In-service withdrawals prior to age 62 are not permitted from which of
the following? – ANSWER- Cash balance plans
The IRS permits hardship withdrawals from 401(k) plans in cases of
“immediate and heavy financial need.” Which of the following is not
considered immediate and heavy? – ANSWER- Payments to prevent
defaulting on a mortgage for a vacation home
Before rolling assets from an employer sponsored plan to an IRA, one
should consider which of the following? – ANSWER- all
Taxes may be deferred on a qualified plan distribution if it is rolled over
to an IRA, TSA, SEP, governmental 457 plan, or to another qualified
plan. All are true regarding rollovers except – ANSWER- they generally
result in less money for retirement.
All of the following are disadvantages to performing an indirect rollover
from a qualified plan to an existing IRA except – ANSWER- the entire
distribution will be subject to immediate taxation.
Not all distributions from a qualified plan may be rolled over into a
traditional IRA. Which one of the following distributions is an “eligible
rollover distribution”? – ANSWER- The vested cash balance in the plan
When must the designated beneficiary be determined in order to avoid
having to distribute the full IRA balance under the five-year rule? –
ANSWER- September 30 of the year following the participant’s death.
Distributions from qualified plans, 403(b) plans, SEPs, SIMPLEs, and
IRAs are assessed a 10% penalty if they are taken before age 59. There
are exceptions to this rule. Which of the following is not an exception to
this penalty? – ANSWER- The distribution is made to pay homeowners
insurance.
Which of the following is not a step in determining the best plan
distribution option? – ANSWER- Compare the options to what the plan
may offer in the future
Once selected, beneficiaries of a qualified profit sharing plan can be
changed – ANSWER- at any time.
Participant loans are permitted from – ANSWER- qualified plans and
403(b)s.
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