CSA Financial Aspects of Aging 5

Question 1

A senior's Social Security benefit at full retirement age (FRA) is $2,000/month. If she delays claiming until age 70, what is her approximate monthly benefit?

Accepted Answer

$2,640

Answer

Delayed retirement credits increase benefits by 8% per year beyond FRA; delaying from FRA of 67 to age 70 equals 3 years × 8% = 24% increase, yielding $2,000 × 1.24 = $2,480.

Question 2

What is the primary financial risk that longevity annuities (deferred income annuities) are designed to address?

Accepted Answer

Outliving one's assets (longevity risk)

Answer

Longevity annuities (DIAs) are specifically designed to provide guaranteed income starting at an advanced age (e.g., 80 or 85), protecting against the risk of outliving retirement savings.

Question 3

Under the SECURE 2.0 Act (2022), at what age must participants in employer-sponsored retirement plans begin taking Required Minimum Distributions?

Accepted Answer

73

Answer

SECURE 2.0 raised the RMD starting age to 73 for individuals who turn 72 after December 31, 2022, with a further increase to 75 scheduled for 2033.

Question 4

A senior wants to transfer wealth to grandchildren while minimizing gift tax. Which annual exclusion amount applies per recipient for 2024?

Accepted Answer

$18,000

Answer

The annual gift tax exclusion for 2024 is $18,000 per recipient, allowing tax-free gifts to any number of individuals without using the lifetime exemption.

Question 5

Which document authorizes a trusted person to make financial decisions on behalf of a senior who becomes incapacitated?

Accepted Answer

Durable power of attorney for finances

Answer

A durable power of attorney for finances designates an agent to manage financial affairs and remains effective even if the principal becomes incapacitated.

Certified Senior Advisor Exam Practice Test

Certified Senior Advisor Exam Practice Test

CSA Financial Aspects of Aging 5