Certified Financial Planner Retirement Savings and Income Planning

1.Nora expects to spend $72,000 next year. Social Security will pay $24,000 and her pension will pay $18,000. What annual gap must her savings cover?

2.Luis budgets $5,400 a month. Social Security pays $1,900 a month and his pension pays $1,200 a month. What yearly amount is still unmet?

3.Adele and her husband expect $90,000 of household costs. Her Social Security is $28,000, his is $21,000, and her pension is $15,000. He has no pension. What spending gap remains?

4.Camille's first retirement year will cost $54,500. Social Security will pay $19,200 and her pension will pay $11,800. How much must savings pay that year?

5.Henry wants $6,800 a month in retirement. Social Security replaces $2,450 and a pension replaces $1,650. What annual amount is still unmet?

6.Priya has already started her pension of $9,500 a year. She expects $41,000 of costs and $16,500 from Social Security. What gap must her portfolio fill?

7.Owen and Ruth share $78,000 of expenses. Owen's Social Security is $22,400, Ruth's is $14,600, and Ruth's pension is $8,000. Owen has no pension. What must savings still provide?

8.Elena needs $63,000. She will receive $27,500 from Social Security and $12,500 from a pension. A friend says to subtract Social Security a second time. What gap should she plan for?

9.Victor will spend $4,250 a month. Social Security covers $1,600 and his pension covers $900. He has no other guaranteed income. What yearly gap remains?

10.Nina's benefit at full retirement age is $2,000 a month. She delays two years, and the delay credit is 8 percent per year. Her husband can receive a spousal benefit of $1,000, which does not include her delay credits. What is Nina's own monthly benefit after the delay?

11.Carl's full retirement age benefit was $2,000 a month. He delayed three years at 8 percent a year and was receiving $2,480 when he died. June is at her full retirement age, and her survivor benefit is 100 percent of the $2,480. What does June receive each month?

12.Ben's benefit at full retirement age is $1,800 a month. Claiming at 62 reduces it by 30 percent. His wife will take her own $1,400 worker benefit rather than the $900 spousal benefit on his record. What is Ben's monthly benefit?

13.Rosa's benefit at full retirement age is $1,600 a month. She waits three years, and the delay credit is 8 percent per year. A spousal benefit on her husband's record would be $700 a month and would not receive those credits. What is her delayed worker benefit?

14.Ivan was receiving $2,200 a month when he died. At Kara's full retirement age her survivor benefit would be 100 percent of that $2,200. She claims it early, and the early claim reduces it by 20 percent. What does she receive each month?

15.Felix's benefit at full retirement age is $2,400 a month. Omar, his husband, is at full retirement age with his own benefit of $800. A spousal benefit on Felix's record is 50 percent of Felix's full retirement age benefit. Which monthly amount is larger for Omar?

16.Thea's benefit at full retirement age is $1,500 a month. She can delay one year, and the credit is 8 percent. A survivor benefit from her late wife is $1,450 a month. She will claim the larger amount after that delay. Which amount does she claim?

17.Andre's benefit at full retirement age is $2,800 a month. He delays two years at 8 percent per year. His wife claims a spousal benefit at her full retirement age equal to 50 percent of his full retirement age benefit, not the delayed amount. What is her monthly spousal benefit?

18.Lila is 62. Her own benefit at full retirement age is $1,200, and claiming it now reduces it by 30 percent. She can instead take a survivor benefit of $1,100, already reduced for her age. She wants the higher check now. Which amount does she take?

19.Sam works before full retirement age and earns $34,000 in wages. The earnings-test limit is $22,000, and benefits fall by $1 for every $2 over that limit. His $10,000 pension is not counted as earnings. How much is withheld?

20.Imani is under full retirement age and earns $18,400 in wages. The earnings-test limit is $22,000, with a reduction of $1 for every $2 over the limit. She also receives a $6,000 pension. How much benefit is withheld?

21.Hugo reaches full retirement age this year and earns $40,000 before his birthday month. The limit for those months is $25,000, and the reduction is $1 for every $3 over the limit. How much is withheld?

22.Yara reached full retirement age last year. This year she earns $90,000. Before full retirement age the limit was $22,000, with $1 withheld for every $2 over it. What does the earnings test withhold this year?

23.Otis is under full retirement age and earns $36,000. The limit is $22,000, and the reduction is $1 for every $2 over the limit. His annual benefit is only $4,800. How much benefit is actually withheld?

24.Paul receives benefits before full retirement age, so only his wages count. He earns $30,000. His spouse earns $50,000 and is not receiving benefits. The limit is $22,000, and the reduction is $1 for every $2 over it. How much is withheld?

25.Nadine is under full retirement age. Her wages are $25,600 and the limit is $22,400. The reduction is $1 for every $2 of excess wages. She also sold stock for a $9,000 gain. How much is withheld?

26.Chris is under full retirement age and earns $28,000. The earnings-test limit is $22,000. His benefit is reduced by $1 for every $2 over that limit. What amount is withheld?

27.In the year Renee reaches full retirement age, she earns $46,000 before her birthday month. The limit is $28,000, and the reduction is $1 for every $3 over the limit. A $12,000 pension is not earnings. How much is withheld?

28.Wesley is admitted to the hospital for three days and kept original Medicare. An income-related surcharge applies to his Part B and Part D premiums. Which part pays the hospital insurance for this stay?

29.Gloria sees a specialist in the doctor's office. She kept original Medicare and did not join a Medicare Advantage plan. An income-related surcharge applies to her Part B premium. Which part covers the visit?

30.Harvey fills a prescription at a pharmacy. He kept original Medicare and added drug coverage. An income-related surcharge applies to his drug-plan premium. Which coverage pays for the prescription?

31.Sylvia joins a Medicare Advantage plan that provides her Part A and Part B services and includes drug coverage. An income-related surcharge still applies to the Part B and drug portions of her cost. How does she receive those medical services?

32.Leo's income triggers an income-related surcharge. He is in original Medicare with Part D, and his Part A premium is zero because of his work record. Which premiums does the surcharge raise?

33.Claudia wants one private plan that covers hospital care, doctor care, and prescriptions. An income-related surcharge applies to her. She does not want to piece original Medicare together herself. Which choice matches that plan?

34.Martin is a hospital inpatient and kept original Medicare. Part A is premium-free from his work record. An income-related surcharge applies to his Part B and Part D premiums. A neighbor says the surcharge forces a Medicare Advantage enrollment before the stay is covered. What covers the stay?

35.Farah's income triggers an income-related surcharge on her medical premium. She stays in original Medicare and sees her primary doctor. She wonders whether the surcharge moves the visit into the drug benefit. Which part covers the visit?

36.Edgar enrolled in a Medicare Advantage plan that covers Part A services, Part B services, and prescriptions. An income-related surcharge applies. He has a covered outpatient surgery this year. What pays for that surgery?

37.Harper works at a private for-profit software company. The firm wants employees to defer salary and wants to match those deferrals. It is not a school, a charity, or a government. Which plan fits?

38.Dean teaches in a public school district. The district wants the salary-deferral plan available to public schools and to 501(c)(3) organizations. It is not opening a separate governmental deferred-compensation plan. Which plan is that?

39.Rita works for a city government. The city wants a deferred-compensation plan for its employees. It is a local government, not a charity and not a private company. Which plan fits?

40.Dana is self-employed and has no employees. She wants a plan funded only by employer contributions into IRAs, with no employee salary deferral. Which plan fits?

41.Seth owns a private company with 40 employees. Workers will defer pay, and the company will make the required employer contribution. He wants the small-employer plan, not a 401(k) and not a formula pension. Which plan fits?

42.Gail's manufacturer wants to promise each retiree a benefit from pay and years of service. The company, not the employee, keeps the investment risk of funding that promise. Which plan fits?

43.Naomi works at a 501(c)(3) charity hospital. The hospital wants employees to defer salary. It is not a government, and it is not choosing a 401(k). Which plan fits?

44.Marco owns a shop with employees. He wants to contribute only as the employer into IRAs for eligible workers, and he does not want employee salary deferrals. He is not a government employer. Which plan fits?

45.Greta's employer will pay 2 percent of final pay times years of service, and the employer must fund that promise. Employees do not choose the investments for this benefit. Which plan is this?

46.Jonah deferred $8,000, and his employer matched $3,000. The match uses a 3-year cliff: 0 percent before 3 years and 100 percent at 3 years. He leaves after 2 years. How much of these amounts can he keep?

47.Alicia deferred $10,000. The employer match is $4,000 and vests 20 percent for each year of service. She leaves after 4 years. How much of the match can she take?

48.Pete deferred $6,500. The match is $2,500 and uses a 2-year cliff: 0 percent before 2 years and 100 percent once 2 years are done. He leaves on the day the cliff is met. What total can he take?

49.Ruth earns $80,000 and defers 6 percent of pay. The employer matches 50 percent of deferrals up to that 6 percent. A 5-year cliff applies, and she has finished year 5, so the match is 100 percent vested. How large is the vested match?

50.Noah's employer contributed a $5,000 match. The graded schedule is 0 percent after 1 year and 25 percent more at the end of each later year. He leaves when that schedule makes him 50 percent vested. How much of the match is vested? His $7,000 deferral is already his.

51.Keisha deferred $9,000 and received a $4,500 match. The match has a 3-year cliff, and she has 1 year of service, so the vested percent of the match is 0. If she leaves, what match amount is forfeited?

52.Carlos earns $60,000 and defers 4 percent of pay. The employer matches dollar for dollar up to 4 percent of pay. A graded schedule leaves him 60 percent vested in the match. How much of the match can he keep?

53.Helen deferred $5,000. The match is $2,000. The cliff is 0 percent through year 2 and 100 percent at the end of year 3. She has completed year 3. What total leaves with her?

54.Malcolm deferred $12,000. The match is $6,000. The graded schedule gives 20 percent at the end of year 2 and another 20 percent at the end of each following year. He leaves at the end of year 4. How much of the match can he take?

55.Sara converts $40,000 from a traditional IRA to a Roth IRA. The whole amount is pretax, and her rate on it is 22 percent. She pays the tax from cash outside the IRA. How much income tax is due now?

56.Malik converts $18,000 of pretax traditional IRA money to a Roth IRA. The rate on the conversion is 24 percent. What tax is due now?

57.Bianca converts $25,000 of pretax IRA money to a Roth IRA. The rate is 12 percent. She does not spend the converted money. What tax is due now?

58.Colin converts $10,000, all of it pretax, from a traditional IRA to a Roth IRA. The rate is 32 percent. How much tax is due on the conversion?

59.Grace converts $50,000 to a Roth IRA. Of that amount, $20,000 is after-tax basis and $30,000 is pretax. The rate on the pretax portion is 22 percent. How much tax is due now?

60.Arthur converts $7,500 from an all-pretax traditional IRA to a Roth IRA. The rate this year is 24 percent. What tax does the conversion add?

61.Willa converts $20,000 of pretax money to a Roth IRA. The rate is 35 percent. She will not withdraw from the Roth this year. What income tax is due on the conversion?

62.Lewis converts $45,000 of pretax traditional IRA money to a Roth IRA. Use a 12 percent rate, not 22 percent. What tax is due now?

63.Heidi moves $16,000 of pretax IRA money into a Roth IRA. This year's movement is not a qualified Roth distribution, and the rate is 22 percent. How much tax is due now?

64.Harold reached the required-distribution age of 73 in 2026 and has taken nothing. The April 1 rule lets that first distribution wait until April 1, 2027. In January 2027 it is still unpaid. Has he missed it?

65.Celia reached her required-distribution age of 73 in 2026. She paid that first amount on April 1, 2027, as the April 1 rule allowed, and took nothing else in 2027. The 2027 amount was due December 31, 2027. On January 2, 2028, what has she missed?

66.Simon is past his first required year. His required age is 73, and the April 1 rule applied only to that first distribution. This later year was due December 31, and he missed $12,000. The penalty is 25 percent of the shortfall. How much is the penalty?

67.Doris turned 75 in 2026, and 75 is her required-distribution age. The April 1 rule lets the first distribution wait until April 1, 2027. She pays it on March 20, 2027. Her son says missing December 31, 2026 means it was missed. Was it?

68.Otto reached the required age of 73 in 2026. He pays the 2026 distribution on April 1, 2027 and the 2027 distribution on December 15, 2027. A friend calls the April payment missed and says it is taxed in 2026. Both amounts are pretax. How many are 2027 income?

69.Rhea's required age is 73. The April 1 rule covered only her first year, which is over. This later year required $14,000 by December 31. She took $5,000 and missed the rest. The penalty is 25 percent of the shortfall. What is the penalty?

70.Stuart is 72. His required-distribution age is 73, and the April 1 rule would set a first deadline only after he reaches 73. He took no traditional IRA distribution. A coworker calls that a missed distribution. What is true?

71.Wendy turned 73 in 2026, and 73 is her required-distribution age. The April 1 rule gave her until April 1, 2027 for the first distribution. She paid it on April 20, 2027. What is the status of that payment?

72.Frank turned 73 in 2026. That is his required age, and the first distribution of $8,000 was due April 1, 2027. He never paid it. The missed-distribution penalty is 25 percent. What penalty applies to the $8,000?

73.Ira is 57. He takes $20,000 of pretax money from a traditional IRA. He is not disabled, and he did not set up a series of substantially equal payments. The 10 percent additional tax applies before age 59 and a half. How much is it?

74.Marta is 60, past age 59 and a half. She withdraws $15,000 of pretax money from a traditional IRA. That age is the exception, so she does not rely on disability or on substantially equal payments. What is the 10 percent additional tax?

75.Pavel is 48 and takes $30,000 of pretax traditional IRA money. He is disabled, and disability is an exception to the 10 percent additional tax. He did not start substantially equal payments. What is the additional tax?

76.Anita is 52. She receives $9,000 this year as one payment in a series of substantially equal payments from her traditional IRA. The series is an exception to the 10 percent additional tax, and she has not changed it. What additional tax applies?

77.Mark is 50. He changed a series of substantially equal payments too soon, so that exception is lost. The 10 percent additional tax now applies to $24,000. He is not disabled and is under 59 and a half. What is the additional tax?

78.Pearl is 59 and reaches 59 and a half next month. She withdraws $11,000 of pretax IRA money today. The age exception starts at 59 and a half. She is not disabled and has no series of substantially equal payments. What is the additional tax?

79.Edwin is 45. His 401(k) allows an $8,000 hardship withdrawal of pretax money. The hardship label is not an exception to the 10 percent additional tax. He is not disabled, is under 59 and a half, and has no substantially equal payments. What is the additional tax?

80.Denise is 41. She takes $10,000 of pretax traditional IRA money. She is not disabled and has no substantially equal payments. Ordinary income tax at 22 percent and the 10 percent additional tax both apply. What is the combined tax from those two rates?

81.Teresa is 56 and receives $7,200 this year in a series of substantially equal payments from a traditional IRA. The series is an exception, so the 10 percent additional tax does not apply. The payment is still ordinary income at 12 percent. How much is the additional tax?

82.Gordon already used his one 60-day IRA rollover this year. He wants to move the rest of that traditional IRA to a new custodian, and the trustees can transfer it directly. Which method can he still use?

83.Marisol used her one 60-day rollover in March. In October the custodian offers a check made out to her. She asks whether she can deposit that check into a new IRA within 60 days. What is the result?

84.Howard already completed his one 60-day rollover this year. The new IRA custodian will take a transfer sent straight from the old trustee, and the money will not pass through Howard. Is that transfer still allowed?

85.Bridget already used the one 60-day rollover allowed this year. Her plan can send the money to the new IRA trustee for her benefit. A friend says to take the cash and replace it on day 60. Which instruction is sound?

86.Samuel's 401(k) would withhold 20 percent if it paid him directly. He already used his one 60-day IRA rollover this year. The plan can instead pay the IRA trustee directly. What should he do?

87.Fiona already used her one 60-day rollover this year. She asks whether a wire from her current IRA trustee straight to a new IRA trustee is a second 60-day rollover. What is that wire?

88.George completed a 60-day rollover in January with a check payable to himself. That was his one 60-day rollover this year. In August he wants to move a second IRA. Which statement is right?

89.Padma already used her one 60-day rollover this year. The custodian issues a check payable to the new IRA trustee for her benefit, and she never deposits it in her own bank account. What kind of move is this?

90.Anton used his one 60-day rollover in February. In November he takes a pretax traditional IRA distribution payable to himself and plans to put it back on day 45. What is the result?

91.Robert died and left his traditional IRA to his adult son, Evan. Evan must empty the inherited account within 10 years. Robert's widow can treat her separate share as her own IRA. What deadline applies to Evan?

92.Alice is 66 and inherits her husband's traditional IRA. She treats it as her own, and her required-distribution age as owner is 73. Their adult daughter must follow the 10-year rule on a different account. When do Alice's owner distributions start?

93.A father died in 2026. His adult child, Mia, must empty the inherited traditional IRA by the end of the 10th year after the year of death. His widow may treat a separate IRA as her own. By what date must Mia finish?

94.Troy, age 40, withdraws $25,000 of pretax money from an inherited traditional IRA during year 3 of the 10-year rule that applies to him. The surviving spouse inherited nothing from this account. How is the $25,000 taxed?

95.A traditional IRA names Ingrid, the surviving spouse, and Caleb, their adult son. Caleb's share must be emptied within 10 years. Ingrid may roll her share into an IRA in her own name. Who can retitle a share as that person's own IRA?

96.Aaron, an adult child, inherited a traditional IRA and must empty it within 10 years. His mother inherited a different account and is using a surviving-spouse option that is not the 10-year rule. Can Aaron use her option?

97.Clara is 60 and is the surviving spouse. She may treat the traditional IRA as her own and wait until her required age of 73. Their adult son must follow the 10-year rule on his separate share. Clara treats the IRA as her own. Which deadline did she choose?

98.Sophie, an adult child, inherited a traditional IRA. Her father died before his own required distributions began, so she must empty the account by the end of year 10 and owes no withdrawal in year 1. His widow rolled a different IRA into her own name. Sophie takes nothing in year 1. Did she miss a distribution?

99.Miles, an adult child, inherits a traditional IRA worth $100,000 and must empty it within 10 years. In year 2 he withdraws $40,000 of pretax money and leaves the rest. The surviving spouse did not inherit this account. How much is ordinary income to him this year?

100.Hugh receives employer stock from his retirement plan. The basis is $20,000 and the market value is $80,000. Net unrealized appreciation is market value minus basis. What is that appreciation?

101.Leah takes a lump-sum distribution of employer stock and uses net unrealized appreciation treatment. The basis is $15,000 and the market value is $55,000. How much is ordinary income at distribution?

102.Patrick's employer stock has a basis of $12,000 and a market value of $45,000 at distribution. He uses net unrealized appreciation treatment and sells immediately for $45,000. How much is long-term capital gain from the appreciation?

103.Sandra's employer stock has a basis of $10,000 and a market value of $60,000, so the appreciation is $50,000. She rolls the shares into a traditional IRA instead of using net unrealized appreciation treatment. How are later distributions of that pretax value taxed?

104.Keith takes a lump-sum distribution of employer stock and uses net unrealized appreciation treatment. The basis is $8,000 and the market value is $28,000. Which pair is ordinary income now, then the appreciation?

105.Joanna's shares had a basis of $25,000 and a market value of $40,000 at distribution. She used net unrealized appreciation treatment and later sells all the shares for $46,000. How much of the sale is the original appreciation, separate from later gain?

106.Travis declines net unrealized appreciation treatment on employer stock. The basis is $18,000 and the market value is $70,000. The entire market value is ordinary income at distribution. How much ordinary income is that?

107.Elaine receives employer stock in a lump sum. The basis is $30,000 and the market value is $30,000. She uses net unrealized appreciation treatment and sells at $30,000. How much appreciation is taxed as long-term capital gain?

108.Monica's plan distributes employer stock with a basis of $22,000 and a market value of $90,000. Net unrealized appreciation treatment applies, and she sells at once for $90,000. What amount is long-term capital gain from the appreciation?