Practice Test Geeks(CRC) Certified Retirement Counselor Practice Test
← All CRC Flashcard Decks

Retirement Income Management Flashcards

7 cards from real CRC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Retirement Income Management flashcards as text

  1. What is the primary purpose of the 'bucket strategy' in retirement income planning?

    Answer: Segment assets by time horizon to manage sequence-of-returns risk

    The bucket strategy segments assets into short-, medium-, and long-term buckets to ensure near-term needs are met with stable assets while growth assets remain invested.

  2. A retiree has a $1 million portfolio and needs $40,000 annually. Using the 4% rule, which statement is MOST accurate?

    Answer: The 4% withdrawal rate has historically supported 30-year retirements in most scenarios

    The 4% rule, derived from the Trinity Study, showed that a 4% initial withdrawal adjusted for inflation historically sustained portfolios for 30 years in most historical market scenarios.

  3. Which Social Security claiming strategy involves one spouse claiming spousal benefits while the other's benefit grows?

    Answer: Restricted application

    A restricted application allows an eligible spouse to claim only spousal benefits while their own retirement benefit continues to earn delayed retirement credits until age 70.

  4. What is 'longevity risk' in the context of retirement income planning?

    Answer: The risk of outliving one's financial assets

    Longevity risk is the risk that a retiree will outlive their financial assets, making it a central concern in retirement income planning.

  5. Under IRS rules, what is the penalty for failing to take a Required Minimum Distribution (RMD)?

    Answer: 25% of the amount not withdrawn (reduced to 10% if corrected timely)

    SECURE 2.0 reduced the RMD failure penalty to 25% of the missed amount, further reduced to 10% if corrected within two years.

  6. Which type of annuity provides income payments for a specified period regardless of whether the annuitant is alive?

    Answer: Period-certain annuity

    A period-certain annuity guarantees payments for a fixed time period (e.g., 10 or 20 years) whether or not the annuitant survives that period.

  7. What is the 'sequence of returns risk' and when does it have the greatest impact?

    Answer: The risk of poor returns early in retirement when withdrawals deplete a shrinking portfolio

    Sequence of returns risk is most damaging in the early retirement years because large withdrawals from a down market permanently reduce the portfolio's ability to recover.