Retirement Income and Management Flashcards
7 cards from real CRPC 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 and Management flashcards as text
In the context of retirement income, what is 'asset-liability matching'?
Answer: Aligning specific assets or income streams to fund specific future liabilities
Asset-liability matching links dedicated assets or income streams to specific future expenses, reducing the risk of funding shortfalls.
A fixed-indexed annuity (FIA) credits interest based on which of the following?
Answer: Performance of an external index subject to a cap or participation rate
FIAs link credited interest to an external index like the S&P 500, but gains are subject to caps, spreads, or participation rates, and principal is protected.
Which Medicare part covers inpatient hospital care and is premium-free for most retirees?
Answer: Medicare Part A
Medicare Part A covers inpatient hospital, skilled nursing facility, hospice, and some home health care, and carries no premium for those with sufficient work history.
What is the primary tax advantage of a Health Savings Account (HSA) in retirement income planning?
Answer: Triple tax benefit: deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses
HSAs offer a triple tax advantage making them highly efficient for funding healthcare costs in retirement.
A retiree's withdrawal rate is described as 'sustainable' when it achieves what outcome?
Answer: The portfolio survives the entire retirement period with money remaining
A sustainable withdrawal rate is one that allows the portfolio to fund withdrawals throughout the entire retirement horizon without being depleted.
Under the 'bucket strategy,' what type of assets are typically held in Bucket 1 (short-term bucket)?
Answer: Cash and short-term fixed income covering 1-2 years of expenses
Bucket 1 holds liquid, stable assets to cover near-term expenses without requiring portfolio liquidation during market downturns.
Which of the following is an advantage of delaying Social Security benefits from age 62 to age 70?
Answer: Benefits increase by approximately 6-8% per year of delay
Delayed retirement credits increase Social Security benefits by up to 8% per year beyond full retirement age, plus annual COLA adjustments.