AAMS Retirement Planning & Distribution Strategies 2

Question 1

Which of the following is a key advantage of a defined benefit (DB) pension plan over a defined contribution (DC) plan?

Accepted Answer

Employer bears the investment risk and guarantees benefits

Answer

In a defined benefit plan, the employer shoulders the investment risk and guarantees a specific retirement benefit based on a formula.

Question 2

What does the term 'vesting' mean in the context of employer-sponsored retirement plans?

Accepted Answer

Employee's non-forfeitable right to employer contributions

Answer

Vesting refers to the employee's right to keep employer contributions; once fully vested, those contributions cannot be forfeited.

Question 3

Which distribution strategy systematically withdraws from taxable accounts first, then tax-deferred, then tax-free to maximize tax efficiency?

Accepted Answer

Traditional sequencing strategy

Answer

The traditional sequencing strategy withdraws from taxable accounts first, then tax-deferred (e.g., traditional IRA), then tax-free (e.g., Roth) accounts to manage tax brackets efficiently over time.

Question 4

Under the SECURE Act (2019), most non-spouse beneficiaries inheriting an IRA must deplete the account within:

Accepted Answer

10 years

Answer

The SECURE Act eliminated the stretch IRA for most non-spouse beneficiaries and required full distribution within 10 years of the account owner's death.

Question 5

Which of the following individuals qualifies for a Health Savings Account (HSA) to supplement retirement medical expenses?

Accepted Answer

An employee enrolled in a High-Deductible Health Plan (HDHP)

Answer

Only individuals enrolled in a qualified High-Deductible Health Plan (HDHP) are eligible to contribute to an HSA.

(AAMS) Accredited Asset Management Specialist Practice Test

(AAMS) Accredited Asset Management Specialist Practice Test

AAMS Retirement Planning & Distribution Strategies 2