RFC Retirement & Estate Planning Fundamentals

Question 1

What is the primary purpose of a 401(k) retirement plan?

Accepted Answer

To save for retirement

Answer

To pay off student loans

Answer

To fund emergency expenses

Answer

To reduce insurance premiums

Question 2

Which type of IRA allows for tax-free withdrawals in retirement?

Accepted Answer

Roth IRA

Answer

Traditional IRA

Answer

SEP IRA

Answer

SIMPLE IRA

Question 3

What is the purpose of a will in estate planning?

Accepted Answer

To name beneficiaries and asset distribution

Answer

To avoid taxes completely

Answer

To apply for life insurance

Answer

To increase credit score

Question 4

Which document appoints someone to manage financial affairs if you're incapacitated?

Accepted Answer

Durable power of attorney

Answer

Living will

Answer

Trust

Answer

Healthcare proxy

Question 5

What is the main advantage of a trust in estate planning?

Accepted Answer

Avoid probate

Answer

Avoid income taxes

Answer

Provide higher returns

Answer

Ensure joint ownership

Question 6

When should retirement planning ideally begin?

Accepted Answer

As early as possible

Answer

After age 50

Answer

Immediately before retirement

Answer

Only after buying a house