Financial Aspects of Aging Flashcards
7 cards from real CSA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Financial Aspects of Aging flashcards as text
When evaluating a long-term care insurance policy, which factor MOST directly determines the daily benefit amount needed?
Answer: The average cost of care in the client's geographic area
The daily benefit amount should be based on the actual cost of care services in the client's local area, since costs vary significantly by region.
A 68-year-old man has a $500,000 traditional IRA. His RMD for the year is $19,608. If he fails to take the RMD, what is the IRS penalty on the missed amount?
Answer: 25% excise tax
The SECURE 2.0 Act reduced the RMD failure penalty to 25% of the missed amount (reduced further to 10% if corrected promptly), replacing the prior 50% penalty.
Which of the following is considered a 'countable asset' for Medicaid long-term care eligibility?
Answer: Checking and savings accounts
Checking and savings accounts are countable assets for Medicaid purposes, while a primary home (when a spouse lives there), one vehicle, and irrevocable burial contracts are typically exempt.
A 75-year-old client withdraws $20,000 from her traditional IRA. How is this distribution taxed?
Answer: As ordinary income in the year of distribution
Traditional IRA distributions are taxed as ordinary income in the year they are received, regardless of the account holder's age.
What does the 'Community Spouse Resource Allowance' (CSRA) protect in Medicaid planning?
Answer: A portion of the couple's assets for the spouse remaining at home
The CSRA allows the community (non-institutionalized) spouse to retain a federally defined minimum and maximum share of the couple's countable assets.
Which investment vehicle provides a guaranteed income stream for life and is most analogous to a private pension?
Answer: Single premium immediate annuity (SPIA)
A single premium immediate annuity (SPIA) converts a lump sum into a guaranteed lifetime income stream, functioning similarly to a defined benefit pension.
Under the Employee Retirement Income Security Act (ERISA), what is the maximum percentage of a pension benefit that can be assigned to a former spouse via a Qualified Domestic Relations Order (QDRO)?
Answer: No federal statutory maximum
ERISA does not set a maximum percentage — a QDRO can assign any portion of a pension benefit to an alternate payee, as determined by the divorce court.