Social Security Module 3 Exam

Which of the following is not usually a component of optimizing retirement finances?

• Considering all forms of reliable and variable income streams

• The tax consequences of when to claim Social Security, and the timing and sequence of withdrawal from retirement accounts

• Attempting to decrease the taxation of Social Security benefits for high net-worth, affluent clients

• Life insurance and long-term care options

What is the most important benefit of retirees working with a team of retirement professionals?

• Establishing legacy and charitable giving plans

• Coordinating financial, legal, tax, and healthcare planning

• Working with CPAs to reduce taxes on Social Security income

• Creating the proper legal documents for inheritance

What is the name of the act which most recently increased the age when RMDs begin?

• FICA

• The BBA of 2015

• SECURE Act

• SECURE 2.0 Act

If a couple has an annual spending goal of $80k, and both individuals qualify for Social Security retirement benefits, why would you expect their taxable income to be lower by delaying to collect Social Security?

• Social Security has a tax preference, so if it makes up a lower portion of their income below a threshold, they have lower taxation with the same overall income.

• This is incorrect - their total income will be taxed in the same way.

• Their taxable income will be lower only in the years before they collect their Social Security.

• Social Security has a tax preference, so none of it is subject to taxation.

When choosing a software program to analyze the Social Security claiming decisions, which statement is true?

• Most Social Security software programs are similar in their precision and user-friendliness

• The most important component is that clients are shown how they can maximize their lifetime income

• The accuracy of calculations, variety of household configurations, and explanation of results are very important

• The price of the software is a good indication of how accurate it is

Comprehensive retirement financial planning is best described as...

• What most workers do in their late 50's as they prepare to stop working

• A way for retirees to possibly increase their standard of living in retirement and extend the longevity of their portfolios

• A simple process and set of procedures that can be generalized and applied to most retirees' circumstances

• A service that is only provided by financial advisors

Which of the following is something about the Social Security program that most workers are aware of?

• The Social Security program faced a severe and immediate shortfall in 1983

• If no changes are made to the program the trust fund will not be able to pay 100% of benefits by about 2034

• The program has been running a surplus since 1984

• Taxation of Social Security benefits brings in about $32 billion annually to the trust fund

Which of the following is not true?

• There is no way for an advisor to help any of their clients reduce taxation on their Social Security income.

• Someone who might not be paying taxes on their Social Security now may have to in the future, due to COLAs.

• Some individuals and couples cannot reduce the taxation on their Social Security income due to their overall financial situation.

• Some individuals and couples do not pay taxes on any portion of their Social Security income.

What is meant by "bridge the gap" when talking about Social Security and retirement income?

• If collecting Social Security while still having an earned income under FRA, this refers to the amount above the earnings limit

• Retirement income will vary year by year, and some years it will be decreased when the market is low. This refers to strategies used in those years

• Using IRA and other investment funds in the years after earned income has slowed or subsided but before receiving Social Security income.

• The age gap between a couple usually dictates when the best Social Security filing dates will be for each of them.

Which of the following factors contribute to the increased importance of optimizing Social Security income for most retirees?

• Life expectancy has decreased

• Fewer retirees are receiving defined benefit retirement pension plans

• Retirees generally have a high rate of savings

• The rise in two-income households decreases the longevity risk for survivors