Mixed Deck — All CFG Topics Flashcards

Which government program is the primary payer for long-term care services in skilled nursing facilities for low-income older adults in the US?

Answer: Medicaid

Medicaid is the primary payer for long-term care services in skilled nursing facilities for individuals who meet income and asset eligibility requirements.

Which program provides cash assistance to low-income elderly and disabled individuals who have limited Social Security work history?

Answer: Supplemental Security Income (SSI)

SSI is a needs-based federal program providing monthly cash payments to aged, blind, or disabled individuals with limited income and resources.

What is 'elder financial exploitation' (EFE)?

Answer: The illegal or improper use of an older adult's funds, property, or assets by another person

Elder financial exploitation involves the illegal, unauthorized, or improper use of an older adult's resources by a trusted person, caregiver, family member, or stranger for personal gain.

An older adult rates her life as highly satisfying despite chronic pain and limited mobility. This phenomenon is known as:

Answer: The disability paradox or adaptation level effect

The disability paradox describes how people with severe disabilities often report high quality of life because they adapt their internal standards and comparison points over time.

An older adult moves into an assisted living facility and needs to spend down assets for Medicaid eligibility. Which asset is generally considered exempt?

Answer: Primary residence (if spouse still lives there)

A primary residence is generally exempt from Medicaid spend-down requirements when a community spouse continues to live in it.

Under the SECURE 2.0 Act, what is the new age at which RMDs must begin for individuals born between 1951 and 1959?

Answer: 73

SECURE 2.0 raised the RMD starting age to 73 for individuals born between 1951 and 1959, and to 75 for those born in 1960 or later.

What role does social support play in aging?

Answer: Supports mental health

Social support plays a vital role in aging by supporting mental health, reducing feelings of loneliness, and providing a sense of belonging. Strong social connections can act as a buffer against stress and contribute to a higher quality of life and overall well-being in older adults.

A CFG advisor is reviewing a client's estate plan that includes an irrevocable life insurance trust (ILIT). What is the primary estate planning advantage of holding life insurance in an ILIT?

Answer: Policy death benefits are excluded from the insured's taxable estate

When life insurance is owned by an ILIT rather than the insured, the death benefit is not included in the insured's gross estate, reducing potential estate taxes.

What is the Medicaid 'look-back period' for most asset transfers?

Answer: 60 months

Medicaid uses a 60-month (5-year) look-back period for most asset transfers to prevent applicants from gifting assets to qualify for benefits.

Elder financial abuse perpetrated by a family member or trusted person is legally classified as:

Answer: A form of elder abuse subject to criminal and civil penalties

Financial exploitation by family members or caregivers constitutes elder abuse under both state and federal law, carrying criminal and civil penalties.

Which of the following is a key difference between Medicare and Medicaid when paying for nursing home care?

Answer: Medicare covers skilled nursing care for a limited time after hospitalization while Medicaid can cover long-term custodial care

Medicare covers skilled nursing facility care for up to 100 days following a qualifying hospital stay, whereas Medicaid covers long-term custodial nursing home care for eligible low-income individuals.

For a single individual in 2024, Social Security benefits become 85% taxable when combined income (AGI + nontaxable interest + 50% of SS benefits) exceeds:

Answer: $34,000

For single filers, up to 85% of Social Security benefits are taxable when combined income exceeds $34,000.

A financial gerontologist is screening a new 78-year-old client. Which instrument is commonly used to briefly assess cognitive function in this population?

Answer: Montreal Cognitive Assessment (MoCA)

The MoCA is a widely used 30-point brief cognitive screening tool sensitive to mild cognitive impairment, commonly used in geriatric and financial capacity assessments.

The concept of 'age-related financial vulnerability' is MOST associated with which combination of factors?

Answer: Cognitive decline, social isolation, and emotional regulation changes

Research identifies cognitive changes impairing judgment, loneliness increasing susceptibility to social influence, and altered emotional processing as the triad driving financial exploitation risk.

What is required to access retirement accounts without penalty?

Answer: Age 59½ or older

To access funds from most qualified retirement accounts, such as 401(k)s and IRAs, without incurring a 10% early withdrawal penalty, the account holder must generally be age 59½ or older. This age requirement is set by the IRS to encourage long-term saving for retirement. While some exceptions exist, reaching this specific age is the standard for penalty-free withdrawals.

Which age-related physical change most commonly affects an older adult's ability to tolerate financial stress and make complex decisions?

Answer: Reduced processing speed and working memory

Age-related declines in processing speed and working memory are the cognitive changes most directly linked to difficulty with complex financial decision-making.

What is a primary consideration in financial planning for older adults?

Answer: Income sustainability

Income sustainability is a primary consideration in financial planning for older adults, focusing on ensuring a steady and sufficient stream of income throughout retirement. This planning aims to cover living expenses, healthcare costs, and maintain a desired lifestyle without outliving one's savings.

What is a common estate planning tool to avoid probate?

Answer: Living trust

A living trust is a common estate planning tool specifically designed to avoid probate. Assets transferred into a living trust during the grantor's lifetime can be distributed to beneficiaries by the trustee upon the grantor's death without court supervision. This process saves time, reduces costs, and maintains privacy compared to assets that must go through the public probate court system based on a will.

What is 'cognitive bias' in financial decision-making, and which bias most commonly leads older adults to fall victim to scams?

Answer: Authority bias; seniors defer to perceived experts or authority figures, making them vulnerable to impersonation scams

Authority bias leads individuals to trust and comply with perceived authority figures, which fraudsters exploit by impersonating IRS agents, Medicare representatives, or law enforcement to scam older adults.

Which approach to retirement income planning segments assets into 'buckets' based on time horizon?

Answer: Bucket strategy

The bucket strategy divides retirement assets into short-, medium-, and long-term buckets with different investment allocations matching each time horizon.