CFG Financial Planning for Older Adults 3

Question 1

Which of the following is a key feature of a reverse mortgage (HECM)?

Accepted Answer

The loan becomes due when the borrower permanently leaves the home

Answer

A Home Equity Conversion Mortgage (HECM) becomes due and payable when the last surviving borrower permanently vacates, sells, or passes away.

Question 2

What is the 'widow's penalty' in the context of Social Security taxation?

Accepted Answer

A surviving spouse filing as single faces lower income thresholds for Social Security taxation

Answer

After a spouse dies, the survivor files as single, which means lower income thresholds triggering Social Security taxation compared to married filing jointly.

Question 3

A fiduciary financial planner working with older clients is MOST obligated to:

Accepted Answer

Act in the client's best interest at all times

Answer

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.

Question 4

Which Social Security claiming strategy involves one spouse claiming spousal benefits while the other spouse's benefit continues to grow?

Accepted Answer

Restricted application

Answer

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.

Question 5

What is the primary risk of using a 4% withdrawal rate in retirement planning?

Accepted Answer

It may not be sustainable over a 30+ year retirement in low-return environments

Answer

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.

(CFG) Certified Financial Gerontologist Practice Test

(CFG) Certified Financial Gerontologist Practice Test

CFG Financial Planning for Older Adults 3