Practice Test GeeksCRPC - Chartered Retirement Planning Counselor Practice Test
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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

  1. What is the primary purpose of including Treasury Inflation-Protected Securities (TIPS) in a retirement income portfolio?

    Answer: To protect purchasing power by adjusting principal with inflation

    TIPS principal values adjust with the Consumer Price Index, protecting retirees from the erosion of purchasing power caused by inflation.

  2. Under the SECURE 2.0 Act, beginning in 2033, at what age must most individuals start taking required minimum distributions from traditional IRAs?

    Answer: 75

    SECURE 2.0 further raised the RMD age to 75, effective for those who turn 74 after December 31, 2032.

  3. A couple is considering long-term care insurance. Which premium payment structure provides the most certainty of cost over time?

    Answer: Non-cancelable, guaranteed renewable policy with level premiums

    A non-cancelable, guaranteed renewable policy with level premiums cannot have premiums increased, providing maximum premium certainty for the policyholder.

  4. What is 'reverse dollar-cost averaging' and why does it negatively affect retirees?

    Answer: Selling more shares when prices are low during withdrawals, permanently depleting the portfolio faster

    When withdrawing a fixed dollar amount from a declining portfolio, more shares must be sold at lower prices, accelerating portfolio depletion.

  5. Which strategy allows a retiree to tap home equity for retirement income while remaining in the home?

    Answer: Reverse mortgage (Home Equity Conversion Mortgage)

    A HECM reverse mortgage allows homeowners 62 or older to convert home equity into income or a line of credit while continuing to live in the home.

  6. What is the income 'replacement ratio' concept used for in retirement income planning?

    Answer: The percentage of pre-retirement income needed to maintain the same standard of living in retirement

    The replacement ratio estimates what percentage of pre-retirement income must be replaced to sustain a retiree's lifestyle, typically cited as 70-90%.

  7. A retiree chooses a 'dynamic withdrawal strategy' that adjusts spending based on portfolio performance. What is the main benefit compared to a fixed dollar withdrawal strategy?

    Answer: It reduces the probability of portfolio depletion by cutting spending during poor market periods

    Dynamic withdrawal strategies improve portfolio longevity by reducing withdrawals when returns are poor, adapting spending to actual portfolio performance.