Retirement Planning And Multiple Objectives

Question 1

What three steps do you take to determine income available in retirement?

Answer 1

1. Identify current Assets
2. Subtract any non-amortized Liabilities tied to these assets.
3. Group these resources according to how they will be taxed upon distribution.

Question 2

Which of a clients assets should not be included in any list of retirement income producers?

Answer 2

• Emergency Funds
• College Funds
• The value of a personal residence or other use assets, except to the extent that they will be sold and proceeds retained.

Question 3

What are the two steps to be followed in determining the amount of money a client must save and invest for retirement

Answer 3

1. Determine the first retirement year deficit based on inflation adjusted income sources
2. Determine the total retirement fund needed to meet the income deficit.

Question 4

Discounting and Compounding are generally synonymous concepts in a Time Value of Money Calculation

Answer 4

FALSE
Discounting and compounding are opposite time value of money concepts. Discounting is generally used to determine the present value of money that will be received in the future. Compounding is generally used to determine the future value of money invested today.