CRPC 2024 Practice Questions with
Correct Answers
Which of the following generally are considered potential sources for the funds to cover
the cost of long-term custodial care? - Answer-Medicaid, Medicare, group long-term
care insurance offered through employers
Medicaid and long-term care (ltc) insurance provide - Answer-recipients with benefits
such as nursing home care.
Medicare provides - Answer-only 20 days of skilled nursing care at full cost and 80 days
thereafter with a substantial copay, in only a limited number of situations. It is designed
only to provide temporary care while patients improve enough to go home, but it does
provide some level of LTC coverage.
Which one of the following is a potential problem with a golden parachute? - Answer-
Any excess payment would be nondeductible by the payor and subject to an excise tax
by the employee.
A fundamental duty owed to a client is to always look out for what is in the client's best
interest, what fiduciary duty best personifies this? - Answer-duty of loyalty
The fiduciary duty that best personifies looking out for the client's best interest first is -
Answer-the fiduciary duty of loyalty. This duty requires being loyal to the client first and
foremost, and always looking out for what is in their best interest.
If compensation falls into the golden parachute category, - Answer-the employer will
lose the deduction on any excess parachute payments and the employee will be
charged a nondeductible 20% excise tax on any excess parachute payments.
Which one of the following types of distributions are eligible for rollover treatment -
Answer-A lump-sum payment from a profit sharing plan payable upon separation from
service is eligible for rollover treatment.
A lump-sum payment from a profit sharing plan payable upon separation from service is
- Answer-eligible for rollover treatment.
The following distributions are not eligible for rollover treatment: - Answer-1.
Distributions that are part of a series of substantially equal periodic payments are not
eligible for rollover treatment.
2. Distributions that are made to comply with the minimum distribution requirements are
not eligible for rollover treatment.
,3. The nontaxable portion of any IRA distribution is not eligible for rollover treatment.
The spouse may waive the qualified joint and survivor annuity (QJSA) option via -
Answer-via written consent, which includes acknowledging the effect of the waiver and
the naming of another beneficiary.
Which of the following are correct statements about survivor benefits from a qualified
retirement plan? - Answer-The qualified joint and survivor annuity (QJSA) may be
waived if the spouse gives written consent to the effect of the election and the naming of
another beneficiary. Defined benefit, money purchase, and target benefit plans must
provide a QJSA. A pension plan is not required to provide a survivor annuity if the plan
participant and spouse have been married for less than one year. The QJSA payable to
the spouse must be at least 50%, but not more than 100%, of the annuity amount
payable during the joint lives and actuarially equivalent to a single life annuity over the
life of the participant.
If the participant and spouse have been married for less than one year, the QJSA plan -
Answer-does not have to provide a survivor annuity.
The QJSA must be - Answer-actuarially equivalent to a single life annuity over the life of
the participant and at least 50%, but not more than 100%, of the annuity payable during
the joint lives of the participant and spouse.
Profit sharing plans that accept direct transfers from pension plans are subject -
Answer-to the QJSA requirements.
The Department of Labor requirements regarding advice given to retirement investors
will most likely - Answer-INCREASE CLIENT EXPECTATIONS OF ADVISERS AND
PUT DOWNWARD PRESSURE ON FEES
If asking you to solve for an annuity due where payments occur at the beginning of the
period - Answer-you would set calculator for BEG.
identifying specific funds in which to invest are discussed on? - Answer-Specific
investments are not discussed until step four of the planning process, when the planner
develops and presents the retirement plan
The client's ability to purchase insurance or investments is reviewed - Answer-in step
three of the planning process, in which an analysis and evaluation of financial status
takes place.
During the data gathering process the planner should identify - Answer-the clients
retirement account balances, income sources and amounts and determine his or her
risk tolerance.
Net worth is defined as - Answer-assets minus liabilitie
, Net cash flow is calculated by - Answer-subtracting total cash outflows from total cash
inflows.
College funding is considered a - Answer-a lifestyle goal
Foundation goals are those that - Answer-contribute to more basic living needs such as
food, insurance, and emergency funds. The coverage of risk exposures is also
considered a foundation financial goal.
You have completed all of the activities involved in the data gathering step of the
financial planning process, including obtaining sufficient quantitative information and
documents. What is the next step of the process - Answer-Analyzing and evaluating the
client's information. Once you have gathered all of the appropriate data needed, the
next step is to analyze it.
With some exceptions, most categories of living expenses, such as transportation,
clothing, and housing - Answer-decrease during retirement years.
Some expenses may even increase during retirement years. - Answer-such as travel
and medical
It is true that Social Security benefits may? - Answer-may increase for people who work
past their Social Security full retirement age. Additionally, wages and salaries earned
during retirement will obviously increase retirement income.
longer life spans will result - Answer-in a need for more retirement income
If client retirement funds are insufficient to meet goals - Answer-gifts to children should
decrease.
Delaying retirement - Answer-will decrease the need for retirement income.
When a client's funds are insufficient to attain retirement goals, it is appropriate for the
planner to suggest - Answer-retiring later than initially planned, performing part-time
work during retirement, spending less and saving more during retirement.
During retirement, CLIENT wants to receive $50,000 at the end of each year for the rest
of his life. To calculate the amount that she will need to save, you need to solve for -
Answer-ordinary annuity—set calculator at end. You do need to set the calculator in
END mode and solve for ordinary annuity.
If asked to solve for an annuity due (where payments occur at the beginning of the
period) - Answer-you would set calculator for BEG.
Correct Answers
Which of the following generally are considered potential sources for the funds to cover
the cost of long-term custodial care? - Answer-Medicaid, Medicare, group long-term
care insurance offered through employers
Medicaid and long-term care (ltc) insurance provide - Answer-recipients with benefits
such as nursing home care.
Medicare provides - Answer-only 20 days of skilled nursing care at full cost and 80 days
thereafter with a substantial copay, in only a limited number of situations. It is designed
only to provide temporary care while patients improve enough to go home, but it does
provide some level of LTC coverage.
Which one of the following is a potential problem with a golden parachute? - Answer-
Any excess payment would be nondeductible by the payor and subject to an excise tax
by the employee.
A fundamental duty owed to a client is to always look out for what is in the client's best
interest, what fiduciary duty best personifies this? - Answer-duty of loyalty
The fiduciary duty that best personifies looking out for the client's best interest first is -
Answer-the fiduciary duty of loyalty. This duty requires being loyal to the client first and
foremost, and always looking out for what is in their best interest.
If compensation falls into the golden parachute category, - Answer-the employer will
lose the deduction on any excess parachute payments and the employee will be
charged a nondeductible 20% excise tax on any excess parachute payments.
Which one of the following types of distributions are eligible for rollover treatment -
Answer-A lump-sum payment from a profit sharing plan payable upon separation from
service is eligible for rollover treatment.
A lump-sum payment from a profit sharing plan payable upon separation from service is
- Answer-eligible for rollover treatment.
The following distributions are not eligible for rollover treatment: - Answer-1.
Distributions that are part of a series of substantially equal periodic payments are not
eligible for rollover treatment.
2. Distributions that are made to comply with the minimum distribution requirements are
not eligible for rollover treatment.
,3. The nontaxable portion of any IRA distribution is not eligible for rollover treatment.
The spouse may waive the qualified joint and survivor annuity (QJSA) option via -
Answer-via written consent, which includes acknowledging the effect of the waiver and
the naming of another beneficiary.
Which of the following are correct statements about survivor benefits from a qualified
retirement plan? - Answer-The qualified joint and survivor annuity (QJSA) may be
waived if the spouse gives written consent to the effect of the election and the naming of
another beneficiary. Defined benefit, money purchase, and target benefit plans must
provide a QJSA. A pension plan is not required to provide a survivor annuity if the plan
participant and spouse have been married for less than one year. The QJSA payable to
the spouse must be at least 50%, but not more than 100%, of the annuity amount
payable during the joint lives and actuarially equivalent to a single life annuity over the
life of the participant.
If the participant and spouse have been married for less than one year, the QJSA plan -
Answer-does not have to provide a survivor annuity.
The QJSA must be - Answer-actuarially equivalent to a single life annuity over the life of
the participant and at least 50%, but not more than 100%, of the annuity payable during
the joint lives of the participant and spouse.
Profit sharing plans that accept direct transfers from pension plans are subject -
Answer-to the QJSA requirements.
The Department of Labor requirements regarding advice given to retirement investors
will most likely - Answer-INCREASE CLIENT EXPECTATIONS OF ADVISERS AND
PUT DOWNWARD PRESSURE ON FEES
If asking you to solve for an annuity due where payments occur at the beginning of the
period - Answer-you would set calculator for BEG.
identifying specific funds in which to invest are discussed on? - Answer-Specific
investments are not discussed until step four of the planning process, when the planner
develops and presents the retirement plan
The client's ability to purchase insurance or investments is reviewed - Answer-in step
three of the planning process, in which an analysis and evaluation of financial status
takes place.
During the data gathering process the planner should identify - Answer-the clients
retirement account balances, income sources and amounts and determine his or her
risk tolerance.
Net worth is defined as - Answer-assets minus liabilitie
, Net cash flow is calculated by - Answer-subtracting total cash outflows from total cash
inflows.
College funding is considered a - Answer-a lifestyle goal
Foundation goals are those that - Answer-contribute to more basic living needs such as
food, insurance, and emergency funds. The coverage of risk exposures is also
considered a foundation financial goal.
You have completed all of the activities involved in the data gathering step of the
financial planning process, including obtaining sufficient quantitative information and
documents. What is the next step of the process - Answer-Analyzing and evaluating the
client's information. Once you have gathered all of the appropriate data needed, the
next step is to analyze it.
With some exceptions, most categories of living expenses, such as transportation,
clothing, and housing - Answer-decrease during retirement years.
Some expenses may even increase during retirement years. - Answer-such as travel
and medical
It is true that Social Security benefits may? - Answer-may increase for people who work
past their Social Security full retirement age. Additionally, wages and salaries earned
during retirement will obviously increase retirement income.
longer life spans will result - Answer-in a need for more retirement income
If client retirement funds are insufficient to meet goals - Answer-gifts to children should
decrease.
Delaying retirement - Answer-will decrease the need for retirement income.
When a client's funds are insufficient to attain retirement goals, it is appropriate for the
planner to suggest - Answer-retiring later than initially planned, performing part-time
work during retirement, spending less and saving more during retirement.
During retirement, CLIENT wants to receive $50,000 at the end of each year for the rest
of his life. To calculate the amount that she will need to save, you need to solve for -
Answer-ordinary annuity—set calculator at end. You do need to set the calculator in
END mode and solve for ordinary annuity.
If asked to solve for an annuity due (where payments occur at the beginning of the
period) - Answer-you would set calculator for BEG.
