Financial Planning & Retirement Solutions Flashcards

A widow age 60 wants to know when she can receive survivor benefits on her deceased spouse's Social Security record. What is the minimum age?

Answer: 60 (standard minimum)

A surviving spouse can begin collecting Social Security survivor benefits as early as age 60, or age 50 if disabled.

Which type of annuity pays a guaranteed income for the life of the annuitant AND a second person, with payments continuing until both have died?

Answer: Joint and survivor annuity

A joint and survivor annuity provides income for the lifetimes of two people, typically spouses, and is commonly offered as a pension payout option.

What is the 'four percent rule' in retirement income planning?

Answer: Withdraw 4% of the initial portfolio in year one, then adjust for inflation, to target a 30-year income period

The 4% rule, derived from the Trinity Study, suggests withdrawing 4% of the initial portfolio value in the first year of retirement and adjusting for inflation annually to sustain withdrawals for 30 years.

Which account type allows a disabled individual to save money without affecting eligibility for government benefits like SSI and Medicaid?

Answer: ABLE Account (529A)

ABLE accounts (Achieving a Better Life Experience, IRC §529A) allow individuals with disabilities to save up to a certain limit annually without jeopardizing eligibility for means-tested benefits.

When evaluating a defined benefit pension, which option typically provides the HIGHEST monthly payment to the retiree but NO protection for a surviving spouse?

Answer: Life-only (single life annuity)

The life-only or single life annuity option pays the maximum monthly benefit because it stops at the retiree's death with no survivor benefit.

A client aged 73 has a traditional IRA worth $500,000. The IRS Uniform Lifetime Table factor for age 73 is 26.5. What is the approximate RMD?

Answer: $18,868

RMD = Account balance ÷ Distribution period = $500,000 ÷ 26.5 ≈ $18,868.

Which Medicare supplement (Medigap) plan is typically considered the most comprehensive, covering nearly all cost-sharing gaps including Part A and Part B coinsurance?

Answer: Plan G

Medigap Plan G is currently the most comprehensive standardized plan available to new Medicare enrollees, covering Part A and B coinsurance, hospital costs, skilled nursing coinsurance, and foreign travel emergencies.