Financial Planning for Older Adults Flashcards
7 cards from real CFG 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 Planning for Older Adults flashcards as text
Which of the following is a key feature of a reverse mortgage (HECM)?
Answer: The loan becomes due when the borrower permanently leaves the home
A Home Equity Conversion Mortgage (HECM) becomes due and payable when the last surviving borrower permanently vacates, sells, or passes away.
What is the 'widow's penalty' in the context of Social Security taxation?
Answer: A surviving spouse filing as single faces lower income thresholds for Social Security taxation
After a spouse dies, the survivor files as single, which means lower income thresholds triggering Social Security taxation compared to married filing jointly.
A fiduciary financial planner working with older clients is MOST obligated to:
Answer: Act in the client's best interest at all times
A fiduciary is legally and ethically required to act solely in the client's best interest, which is a higher standard than the suitability requirement.
Which Social Security claiming strategy involves one spouse claiming spousal benefits while the other spouse's benefit continues to grow?
Answer: Restricted application
A restricted application allows an eligible spouse (born before January 2, 1954) to claim only the spousal benefit while their own retirement benefit continues accruing delayed credits.
What is the primary risk of using a 4% withdrawal rate in retirement planning?
Answer: It may not be sustainable over a 30+ year retirement in low-return environments
The 4% rule was derived from historical US market data and may fail in prolonged low-return or high-inflation environments, especially over retirements lasting more than 30 years.
An 80-year-old client with moderate cognitive decline should be assessed for which planning concern FIRST?
Answer: Decision-making capacity and the need for a durable power of attorney
Assessing decision-making capacity and ensuring legal documents like a durable power of attorney are in place is the most urgent planning priority for a client with cognitive decline.
Which type of trust is commonly used to provide for a surviving spouse while preserving assets for children from a prior marriage?
Answer: Qualified Terminable Interest Property (QTIP) trust
A QTIP trust provides income to a surviving spouse for life while the grantor controls who ultimately inherits the remaining assets, often protecting children from a prior marriage.