CFG Retirement Income & Estate Planning 2

Question 1

A 73-year-old client failed to take her required minimum distribution (RMD) from her IRA for the current year. What is the IRS excise tax penalty on the amount not withdrawn?

Accepted Answer

25%

Answer

The SECURE 2.0 Act reduced the RMD failure penalty from 50% to 25% (and 10% if corrected in a timely manner).

Question 2

Which estate planning tool allows an elderly client to transfer a home to heirs while retaining the right to live there for life, avoiding probate?

Accepted Answer

Lady Bird deed (enhanced life estate)

Answer

A Lady Bird deed (enhanced life estate deed) lets the owner retain control and lifetime use of the property while automatically transferring it to named beneficiaries at death outside of probate.

Question 3

A client wants guaranteed income for both herself and her spouse, with payments continuing to the survivor. Which annuity payout option best fits?

Accepted Answer

Joint-and-survivor annuity

Answer

A joint-and-survivor annuity provides income for both spouses' lifetimes, with payments continuing (often at a reduced rate) after the first spouse dies.

Question 4

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

Accepted Answer

73

Answer

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.

Question 5

A widower inherits a traditional IRA from his non-spouse sibling. Under the SECURE Act 2.0, which rule generally applies to his distributions?

Accepted Answer

He must take RMDs annually and deplete within 10 years

Answer

Most non-spouse beneficiaries must deplete inherited IRAs within 10 years, and if the original owner had already started RMDs, the beneficiary must also take annual distributions.

(CFG) Certified Financial Gerontologist Practice Test

(CFG) Certified Financial Gerontologist Practice Test

CFG Retirement Income & Estate Planning 2