CSS Financial Planning & Retirement Solutions 4

Question 1

A client receives a lump-sum distribution from a qualified plan and wants to avoid the 20% mandatory withholding. What must they do?

Accepted Answer

Request a direct (trustee-to-trustee) rollover to an IRA

Answer

A direct (trustee-to-trustee) rollover avoids mandatory 20% withholding because the funds never pass through the plan participant's hands.

Question 2

Which of the following best describes 'asset-liability matching' in retirement income planning?

Accepted Answer

Aligning specific assets or income streams to cover anticipated future expenses

Answer

Asset-liability matching involves structuring a portfolio so that specific assets or income streams are earmarked to fund specific future expenses or liabilities.

Question 3

What is the primary tax advantage of a Health Savings Account (HSA) for a senior still covered by a High-Deductible Health Plan (HDHP)?

Accepted Answer

Contributions are tax-deductible, growth is tax-deferred, and withdrawals for qualified medical expenses are tax-free

Answer

HSAs offer a triple tax advantage: contributions are pre-tax (or tax-deductible), funds grow tax-deferred, and withdrawals for qualified medical expenses are completely tax-free.

Question 4

Under the SECURE 2.0 Act, what is the new RMD starting age for individuals born between 1951 and 1959?

Accepted Answer

73

Answer

SECURE 2.0 raised the RMD age to 73 for those born between 1951 and 1959, and to 75 for those born in 1960 or later.

Question 5

A senior client is considering a reverse mortgage. Which statement about Home Equity Conversion Mortgages (HECMs) is CORRECT?

Accepted Answer

The loan becomes due when the borrower moves out, sells the home, or passes away

Answer

A HECM becomes due and payable when the last surviving borrower moves out permanently, sells the home, or dies; no monthly mortgage payments are required.

(CSS) Certified Senior Specialist Practice Test

(CSS) Certified Senior Specialist Practice Test

CSS Financial Planning & Retirement Solutions 4