AAMS Retirement Planning & Distribution Strategies 3

Question 1

Which Social Security claiming strategy generally maximizes lifetime benefits for a healthy individual who can afford to wait?

Accepted Answer

Delaying until age 70

Answer

Delaying Social Security benefits until age 70 results in the maximum monthly benefit, increasing by approximately 8% per year beyond FRA.

Question 2

What is the primary tax advantage of a SEP IRA for a self-employed individual?

Accepted Answer

Higher contribution limits than a traditional IRA

Answer

A SEP IRA allows self-employed individuals to contribute up to 25% of net self-employment income (up to $69,000 in 2024), far exceeding traditional IRA limits.

Question 3

The 'bucket strategy' in retirement income planning divides assets into buckets based on:

Accepted Answer

Time horizon and liquidity needs

Answer

The bucket strategy separates assets into short-term (liquid), medium-term, and long-term buckets based on when funds will be needed, matching time horizon to investment risk.

Question 4

Which factor does NOT affect the calculation of an individual's Social Security retirement benefit?

Accepted Answer

Number of dependents at time of claiming

Answer

Social Security retirement benefits are calculated based on the 35 highest earning years, the claiming age, and years of covered employment — not the number of dependents.

Question 5

A client wants guaranteed income they cannot outlive. Which product is most appropriate?

Accepted Answer

Single Premium Immediate Annuity (SPIA)

Answer

A Single Premium Immediate Annuity (SPIA) converts a lump sum into guaranteed income payments for life, directly addressing longevity risk.

(AAMS) Accredited Asset Management Specialist Practice Test

(AAMS) Accredited Asset Management Specialist Practice Test

AAMS Retirement Planning & Distribution Strategies 3