Practice Test GeeksCRPC - Chartered Retirement Planning Counselor Practice Test
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Retirement Planning Principles 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.

Read the first 7 Retirement Planning Principles flashcards as text

  1. A 68-year-old retiree wants to minimize sequence-of-returns risk in early retirement. Which strategy best addresses this concern?

    Answer: Maintain a cash reserve or bond ladder to avoid selling equities during downturns

    A cash reserve or bond ladder provides a buffer so the retiree avoids selling equities at depressed prices during early-retirement market downturns.

  2. Which retirement income approach matches withdrawals to specific future expenses using individual bonds or CDs that mature when funds are needed?

    Answer: Liability-matching (time-segmentation) strategy

    Liability-matching (time-segmentation) aligns specific assets—individual bonds or CDs—to mature when known future expenses arise.

  3. Under the SECURE 2.0 Act, what is the required beginning date for RMDs for individuals born in 1951?

    Answer: April 1 of the year after they turn 73

    SECURE 2.0 raised the RMD age to 73 for individuals born between 1951 and 1959, so those born in 1951 must begin RMDs by April 1 of the year after turning 73.

  4. What is the primary advantage of a Qualified Longevity Annuity Contract (QLAC) within a traditional IRA?

    Answer: It allows the excluded balance to be removed from RMD calculations until payouts begin (up to age 85)

    A QLAC lets up to a limited dollar amount (indexed annually) be excluded from RMD calculations, with payouts deferred up to age 85, protecting against outliving assets.

  5. A married couple both age 62 are deciding when to claim Social Security. Which factor most strongly supports delaying claiming to age 70?

    Answer: They have sufficient other income and expect long life expectancy

    Sufficient bridge income and longer life expectancy make delay to 70 advantageous, as the 8% per year delayed retirement credits maximize lifetime benefits.

  6. In retirement planning, what does the term 'replacement ratio' refer to?

    Answer: The percentage of pre-retirement income needed to maintain the same lifestyle in retirement

    The replacement ratio is the percentage of pre-retirement income a retiree needs to maintain a comparable standard of living after work ends.

  7. Which of the following best describes the 'funded ratio' used in retirement planning?

    Answer: The ratio of retirement assets plus future income streams to projected retirement liabilities

    The funded ratio compares total retirement resources (assets plus PV of future income) to total projected liabilities, with a ratio above 1.0 indicating financial security.