CFG Financial Planning for Older Adults 5

Question 1

Which of the following documents grants a trusted person legal authority to make financial decisions on behalf of an incapacitated older adult?

Accepted Answer

Durable power of attorney

Answer

A durable power of attorney remains in effect (or becomes effective) during incapacity, allowing the named agent to manage financial affairs on the principal's behalf.

Question 2

An 80-year-old client is in very poor health and has a large traditional IRA. Which strategy may be MOST advantageous from an estate planning perspective?

Accepted Answer

Name a charity as the IRA beneficiary to avoid income tax on distributions

Answer

Naming a qualified charity as IRA beneficiary eliminates income tax on distributions because charities are tax-exempt, making IRAs one of the most tax-efficient assets to leave to charity.

Question 3

The SECURE 2.0 Act increased the required beginning date for RMDs. As of 2023, at what age must most individuals begin taking RMDs?

Accepted Answer

73

Answer

SECURE 2.0 increased the RMD starting age to 73 for individuals who turn 72 after December 31, 2022, with a further increase to 75 scheduled for 2033.

Question 4

Which type of annuity provides a guaranteed income stream for the life of the annuitant with NO remaining value for heirs upon death?

Accepted Answer

Life-only (straight life) annuity

Answer

A life-only annuity pays income for the annuitant's lifetime and ceases upon death, with no residual value, providing the highest monthly payment but no legacy.

Question 5

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

Accepted Answer

Reduced processing speed and working memory

Answer

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

(CFG) Certified Financial Gerontologist Practice Test

(CFG) Certified Financial Gerontologist Practice Test

CFG Financial Planning for Older Adults 5