CWS CWS Retirement Planning

Question 1

What is the 2024 contribution limit for a 401(k) plan for an employee under age 50?

Accepted Answer

$23,000

Answer

The 2024 IRS elective deferral limit for 401(k) plans is $23,000 for employees under age 50.

Question 2

Under the SECURE 2.0 Act, what is the required beginning date for required minimum distributions (RMDs) for individuals born in 1951 or later?

Accepted Answer

April 1 of the year following the year they turn 73

Answer

SECURE 2.0 raised the RMD starting age to 73 for individuals born between 1951 and 1959, with RMDs beginning April 1 of the following year.

Question 3

A client is 55 years old and separates from service from their employer. Under which circumstance can they take penalty-free 401(k) withdrawals?

Accepted Answer

Using the Rule of 55 since separation occurs at or after age 55

Answer

The Rule of 55 allows penalty-free 401(k) withdrawals if you separate from service in or after the year you turn 55.

Question 4

Which Social Security claiming strategy involves one spouse claiming spousal benefits while the other defers their own benefit to grow?

Accepted Answer

Restricted application

Answer

The restricted application strategy allows a spouse to claim spousal benefits at full retirement age while letting their own benefit grow to age 70.

Question 5

What is a defined benefit pension plan's primary advantage over a defined contribution plan from a retiree's perspective?

Accepted Answer

Guaranteed lifetime income regardless of market performance

Answer

Defined benefit plans provide a predictable, guaranteed income stream for life, eliminating longevity and investment risk for the retiree.

CWS - Certified Wealth Strategist Practice Test