CRPC Navigating Retirement Healthcare 3

Question 1

Which of the following best describes a Health Savings Account (HSA) triple tax advantage?

Accepted Answer

Contributions are pre-tax, growth is tax-deferred, withdrawals for qualified expenses are tax-free

Answer

HSAs offer pre-tax contributions, tax-free growth, and tax-free withdrawals when used for qualified medical expenses, creating a unique triple tax benefit.

Question 2

At what age can HSA funds be withdrawn for non-medical expenses without penalty, though ordinary income tax still applies?

Accepted Answer

65

Answer

After age 65, HSA funds withdrawn for non-medical purposes are taxed as ordinary income but are not subject to the 20% penalty, making the HSA behave like a traditional IRA.

Question 3

A retiree enrolled in Medicare Part A wants to continue contributing to his HSA. What is the correct rule?

Accepted Answer

He cannot contribute to an HSA once enrolled in any part of Medicare

Answer

Enrollment in any part of Medicare, including Part A alone, disqualifies an individual from making HSA contributions.

Question 4

What is the primary purpose of a long-term care (LTC) insurance benefit trigger?

Accepted Answer

To define the conditions under which benefits begin to be paid

Answer

Benefit triggers define the qualifying events, typically inability to perform ADLs or cognitive impairment, that must occur before an LTC policy begins paying benefits.

Question 5

Under the HIPAA tax-qualified LTC insurance standard, how many ADL deficiencies must a claimant have to qualify for benefits?

Accepted Answer

2 of 6

Answer

HIPAA requires tax-qualified LTC policies to pay benefits when a claimant cannot perform at least 2 of the 6 standard activities of daily living.

CRPC - Chartered Retirement Planning Counselor Practice Test

CRPC - Chartered Retirement Planning Counselor Practice Test

CRPC Navigating Retirement Healthcare 3