Practice Test GeeksCRPC - Chartered Retirement Planning Counselor Practice Test
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Retirement Income Taxation 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 Taxation flashcards as text

  1. A client receives $18,000 per year from a pension. He contributed $30,000 after-tax to the plan. Using the Simplified Method with 240 expected payments, what is his monthly tax-free exclusion?

    Answer: $125

    $30,000 ÷ 240 payments = $125 per month excluded from taxable income.

  2. IRMAA (Income-Related Monthly Adjustment Amount) affects retirees by surcharging which of the following?

    Answer: Medicare Part B and Part D premiums

    IRMAA adds income-based surcharges to Medicare Part B and Part D premiums for retirees whose MAGI exceeds certain thresholds.

  3. A client withdraws $20,000 from her 401(k) at age 45 due to a total and permanent disability. What is the tax treatment?

    Answer: Taxable as ordinary income but no 10% penalty

    Disability is an exception to the 10% early withdrawal penalty, so the distribution is taxable as ordinary income but avoids the additional 10% penalty.

  4. Which of the following retirement income sources is generally exempt from federal income taxation?

    Answer: Roth IRA qualified distributions

    Qualified Roth IRA distributions are federal income tax-free because contributions were made with after-tax dollars and the account meets age and holding period requirements.

  5. A client has a traditional IRA with $200,000 and a Roth IRA with $100,000. His total RMD for the year is $8,000. From which account(s) can the RMD be taken?

    Answer: From the traditional IRA only, or any combination of traditional IRAs

    RMDs apply only to traditional IRAs (and other pre-tax accounts); Roth IRAs are not subject to RMDs during the owner's lifetime.

  6. What is the 'still working exception' as it relates to RMDs from a 401(k) plan?

    Answer: Allows deferral of RMDs past age 73 if the participant is still employed by the plan sponsor and is not a 5% owner

    The still-working exception permits non-5% owners who remain employed to defer RMDs from their current employer's plan past age 73.

  7. A client age 70 receives a $5,000 qualified charitable distribution (QCD) from her traditional IRA. What is the tax treatment of the QCD?

    Answer: Excluded from gross income and counts toward her RMD

    QCDs up to $105,000 (2024) are excluded from gross income and count toward satisfying the IRA owner's RMD for the year.