Practice Test GeeksCRPC - Chartered Retirement Planning Counselor Practice Test
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Investment Strategies for Retirement 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 Investment Strategies for Retirement flashcards as text

  1. A retiree in the 'go-go' phase wants maximum growth. Which portfolio allocation is LEAST appropriate for a 68-year-old with no pension?

    Answer: 100% equities / 0% bonds

    A 100% equity allocation exposes a retiree to severe sequence-of-returns risk with no buffer assets to draw from during downturns.

  2. Which strategy involves holding increasingly liquid assets in successive 'buckets' to fund near-term, mid-term, and long-term retirement spending?

    Answer: Time segmentation (bucket) strategy

    The time segmentation or bucket strategy segments assets by time horizon, with cash/short-term bonds covering near-term needs and equities funding later years.

  3. An investor holds a large concentrated stock position in her former employer. The PRIMARY risk she faces is:

    Answer: Idiosyncratic (unsystematic) risk

    Idiosyncratic risk is company-specific risk that cannot be diversified away when a portfolio is heavily concentrated in one stock.

  4. A CRPC practitioner recommends dividend-growth stocks for a client seeking retirement income. The MAIN advantage over high-yield bonds for income is:

    Answer: Potential for rising income that can outpace inflation

    Dividend-growth stocks have historically increased distributions over time, providing an income stream that can keep pace with or exceed inflation unlike fixed bond coupon payments.

  5. The 'rising equity glidepath' concept in retirement suggests that equity allocation should:

    Answer: Increase in the early retirement years before declining later

    Research by Pfau and Kitces suggests starting with a lower equity allocation and increasing it gradually reduces sequence-of-returns risk in early retirement.

  6. Which fixed-income investment provides the BEST inflation protection within a retirement portfolio?

    Answer: Treasury Inflation-Protected Securities (TIPS)

    TIPS adjust their principal value with CPI changes, ensuring both interest payments and the inflation-adjusted principal protect purchasing power.

  7. A client asks about 'factor investing' for retirement. Which factor has historically provided the MOST reliable long-term premium relevant to retirement portfolios?

    Answer: Value

    The value factor—buying underpriced stocks relative to fundamentals—has one of the longest documented return premiums dating back to academic research by Fama and French.