Practice Test GeeksCRPC - Chartered Retirement Planning Counselor Practice Test
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Retirement Needs Analysis Flashcards

7 cards from real CRPC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. A client has a defined benefit pension that pays $3,000/month and Social Security of $1,800/month. Her estimated retirement budget is $6,500/month. What is the monthly income gap she must fund from savings?

    Answer: $1,700

    $6,500 − ($3,000 + $1,800) = $1,700 per month must come from personal savings or investments.

  2. Which factor most significantly increases a client's required retirement nest egg when all other variables are held constant?

    Answer: Increasing life expectancy by 5 years

    Extending the distribution period by 5 years substantially increases the required capital because withdrawals must be sustained over a longer horizon.

  3. What does the term 'sequence of returns risk' refer to in retirement planning?

    Answer: The danger that poor investment returns early in retirement can permanently deplete a portfolio

    Sequence of returns risk is the danger that a portfolio will be severely damaged by poor early-retirement returns combined with ongoing withdrawals.

  4. A 65-year-old client has $900,000 in retirement savings. Using the 4% withdrawal guideline, what initial annual withdrawal is recommended?

    Answer: $36,000

    $900,000 × 4% = $36,000 per year as the initial sustainable withdrawal under the 4% rule.

  5. Which of the following is an example of a non-recurring retirement expense that a retirement needs analysis should account for?

    Answer: One-time home renovation upon retirement

    Non-recurring expenses like a home renovation at retirement represent lump-sum costs outside regular monthly income needs.

  6. When using the expense method to estimate retirement income needs, which spending category typically DECREASES significantly in retirement compared to working years?

    Answer: Work-related expenses such as commuting and clothing

    Work-related costs like commuting, business attire, and lunches typically disappear or drop sharply after retirement.

  7. A client's pension offers a single-life annuity of $2,500/month or a joint-and-survivor annuity of $2,100/month. The primary consideration in choosing between them should be:

    Answer: Whether the spouse has independent retirement income

    If the spouse has sufficient independent income, the single-life annuity may be acceptable; otherwise the survivor benefit is critical to spousal financial security.