CRPC CHARTERED RETIREMENT PLANNING
COUNSELOR EXAM BANK | COMPLETE QUESTIONS AND
CORRECT DETAILED ANSWERS | LATEST UPDATE (2026)
| ALREADY GRADED A+
Mary Goodwin's financial situation is as follows:
Cash/cash equivalents$15,000Short-term debts$8,000Long-term debts$133,000Tax
expense$7,000Auto note payments$4,000Invested assets$60,000Use assets$188,000
What is her net worth? - CORRECT ANSWER -D)
$122,000
Assets = $263,000; liabilities = $141,000, so net worth is $122,000. Taxes and auto note
payments appear on the cash flow statement.
At the end of last year, Bill Greer has the following financial information:
Salaries$70,000Auto payments$5,000Insurance payments$3,800Food$8,000Credit card
balance$10,000Dividends$1,100Utilities$3,500Mortgage
payments$14,000Taxes$13,000Clothing$9,000Interest income$2,100Checking
account$4,000Vacations$8,400Donations$5,800
What is the cash flow surplus or (deficit) for Bill? - CORRECT ANSWER -D)
$2,700
Income = $70,000 + $1,100 + $2,100 = $73,200. Expenses = $5,000 + $3,800 + $8,000 + $3,500
+ $14,000 + $13,000 + $9,000 + $8,400 + $5,800 = $70,500, so there is a surplus of $2,700. The
checking account and credit card balances would be on the statement of financial position.
Which of the following are correct statements about income replacement percentages?
Income replacement percentages are typically much higher for those with higher preretirement
incomes.
Income replacement percentages vary between low-income and high-income retirees.
,Income replacement ratios should not be used as the only basis for planning.
Income replacement ratios are useful for younger clients as a guide to their long-range planning
and investing.
A)
I and IV
B)
II, III, and IV
C)
II and III
D)
I and II - CORRECT ANSWER -B)
II, III, and IV
The inverse of Option I is true. Those with a lower preretirement income typically need a much
higher income replacement percentage in retirement.
If Tom and Jenny want to save a fixed amount annually to accumulate $2 million by their
retirement date in 25 years, what level annual end-of-year savings amount will they need to
deposit each year, assuming their savings earn 7% annually?
A)
$31,621
B)
$54,130
C)
$55,692
D)
$29,552 - CORRECT ANSWER -A)
$31,621
,Set your calculator to the "End" mode and "1 P/Yr." Inputs: FV = 2000000, I/YR = 7, N = 25,
PV = 0, then PMT = $31,621
Bill and Lisa have determined that they will need a monthly income of $6,000 during retirement.
They expect to receive Social Security retirement benefits amounting to $3,500 per month at the
beginning of each month. Over the 12 remaining years of their preretirement period, they expect
to generate an average annual after-tax investment return of 8%; during their 25-year retirement
period, they want to assume a 6% annual after-tax investment return compounded monthly. They
want to start their monthly retirement withdrawals on the first day they retire.
What is the lump sum needed at the beginning of retirement to fund this income stream?
A)
$389,957
B)
$931,241
C)
$388,017
D)
$598,504 - CORRECT ANSWER -A)
$389,957
The monthly retirement income need is not specified as "today's dollars," and no inflation rate
specified; therefore, it must be assumed that the $2,500 net monthly income need represents
retirement dollars, and the retirement period income stream is level. To calculate the lump sum
needed at the beginning of retirement, discount the stream of monthly income payments at the
investment return rate:
10BII+ PVAD calculation:
Set calculator on BEG and 12 periods per year, then input the following:
2,500 [PMT]
25 [SHIFT] [N]
, 6 [I/YR]
0 [FV]
Solve for PV = $389,957
LO 1-4
Chris and Eve Bronson have analyzed their current living expenses and estimated their
retirement income need, net of expected Social Security benefits, to be $90,000 in today's
dollars. They are confident that they can earn a 7% after-tax return on their investments, and they
expect inflation to average 4% over the long term.
Determine the lump sum amount the Bronsons will need at the beginning of retirement to fund
their retirement income needs, using the worksheet below.
(1) Adjust income deficit for inflation over the preretirement period:-$ 90,000present value of
retirement income deficit25number of periods until retirement4%% inflation rateFuture value of
income deficit in first retirement year$239,925(2) Determine retirement fund needed to meet
income deficit:$239,925payment (future value of income deficit in first retirement
year)30number of periods in retirement2.8846%I/YR computed using 4% inflation and a 7 -
CORRECT ANSWER -C)
$4,911,256
This PVAD calculation requires that the calculator be set for beginning-of-period payments.
First, the annual retirement income deficit is expressed in retirement-year-one dollars, resulting
in a $239,925 income deficit in the first retirement year. This income deficit grows with inflation
over the 30-year retirement period, and the retirement fund earns a 7% return. The calculator
inputs are $239,925, [PMT]; 30, [N]; 2.8846, [I/YR]. Solve for [PV], to determine the retirement
fund that will generate this income stream. If you enter 2.8846 directly into the calculator, you
will get $4,911,265. If you use the equation to compute I/YR, and then hit the I/YR button you
will get $4,911,256. Either way the answer is clear. The difference is that when you calculate the
I/YR, the calculator takes the interest rate out to nine decimal places. If you enter in the 2.8846,
then the calculator only takes the interest rate to four decimal places.
Assume a client and investment professional have worked together for several years. Recently,
the client's personal and financial circumstances have changed. According to the course
materials, what is the next asset management step that the investment professional should take?
COUNSELOR EXAM BANK | COMPLETE QUESTIONS AND
CORRECT DETAILED ANSWERS | LATEST UPDATE (2026)
| ALREADY GRADED A+
Mary Goodwin's financial situation is as follows:
Cash/cash equivalents$15,000Short-term debts$8,000Long-term debts$133,000Tax
expense$7,000Auto note payments$4,000Invested assets$60,000Use assets$188,000
What is her net worth? - CORRECT ANSWER -D)
$122,000
Assets = $263,000; liabilities = $141,000, so net worth is $122,000. Taxes and auto note
payments appear on the cash flow statement.
At the end of last year, Bill Greer has the following financial information:
Salaries$70,000Auto payments$5,000Insurance payments$3,800Food$8,000Credit card
balance$10,000Dividends$1,100Utilities$3,500Mortgage
payments$14,000Taxes$13,000Clothing$9,000Interest income$2,100Checking
account$4,000Vacations$8,400Donations$5,800
What is the cash flow surplus or (deficit) for Bill? - CORRECT ANSWER -D)
$2,700
Income = $70,000 + $1,100 + $2,100 = $73,200. Expenses = $5,000 + $3,800 + $8,000 + $3,500
+ $14,000 + $13,000 + $9,000 + $8,400 + $5,800 = $70,500, so there is a surplus of $2,700. The
checking account and credit card balances would be on the statement of financial position.
Which of the following are correct statements about income replacement percentages?
Income replacement percentages are typically much higher for those with higher preretirement
incomes.
Income replacement percentages vary between low-income and high-income retirees.
,Income replacement ratios should not be used as the only basis for planning.
Income replacement ratios are useful for younger clients as a guide to their long-range planning
and investing.
A)
I and IV
B)
II, III, and IV
C)
II and III
D)
I and II - CORRECT ANSWER -B)
II, III, and IV
The inverse of Option I is true. Those with a lower preretirement income typically need a much
higher income replacement percentage in retirement.
If Tom and Jenny want to save a fixed amount annually to accumulate $2 million by their
retirement date in 25 years, what level annual end-of-year savings amount will they need to
deposit each year, assuming their savings earn 7% annually?
A)
$31,621
B)
$54,130
C)
$55,692
D)
$29,552 - CORRECT ANSWER -A)
$31,621
,Set your calculator to the "End" mode and "1 P/Yr." Inputs: FV = 2000000, I/YR = 7, N = 25,
PV = 0, then PMT = $31,621
Bill and Lisa have determined that they will need a monthly income of $6,000 during retirement.
They expect to receive Social Security retirement benefits amounting to $3,500 per month at the
beginning of each month. Over the 12 remaining years of their preretirement period, they expect
to generate an average annual after-tax investment return of 8%; during their 25-year retirement
period, they want to assume a 6% annual after-tax investment return compounded monthly. They
want to start their monthly retirement withdrawals on the first day they retire.
What is the lump sum needed at the beginning of retirement to fund this income stream?
A)
$389,957
B)
$931,241
C)
$388,017
D)
$598,504 - CORRECT ANSWER -A)
$389,957
The monthly retirement income need is not specified as "today's dollars," and no inflation rate
specified; therefore, it must be assumed that the $2,500 net monthly income need represents
retirement dollars, and the retirement period income stream is level. To calculate the lump sum
needed at the beginning of retirement, discount the stream of monthly income payments at the
investment return rate:
10BII+ PVAD calculation:
Set calculator on BEG and 12 periods per year, then input the following:
2,500 [PMT]
25 [SHIFT] [N]
, 6 [I/YR]
0 [FV]
Solve for PV = $389,957
LO 1-4
Chris and Eve Bronson have analyzed their current living expenses and estimated their
retirement income need, net of expected Social Security benefits, to be $90,000 in today's
dollars. They are confident that they can earn a 7% after-tax return on their investments, and they
expect inflation to average 4% over the long term.
Determine the lump sum amount the Bronsons will need at the beginning of retirement to fund
their retirement income needs, using the worksheet below.
(1) Adjust income deficit for inflation over the preretirement period:-$ 90,000present value of
retirement income deficit25number of periods until retirement4%% inflation rateFuture value of
income deficit in first retirement year$239,925(2) Determine retirement fund needed to meet
income deficit:$239,925payment (future value of income deficit in first retirement
year)30number of periods in retirement2.8846%I/YR computed using 4% inflation and a 7 -
CORRECT ANSWER -C)
$4,911,256
This PVAD calculation requires that the calculator be set for beginning-of-period payments.
First, the annual retirement income deficit is expressed in retirement-year-one dollars, resulting
in a $239,925 income deficit in the first retirement year. This income deficit grows with inflation
over the 30-year retirement period, and the retirement fund earns a 7% return. The calculator
inputs are $239,925, [PMT]; 30, [N]; 2.8846, [I/YR]. Solve for [PV], to determine the retirement
fund that will generate this income stream. If you enter 2.8846 directly into the calculator, you
will get $4,911,265. If you use the equation to compute I/YR, and then hit the I/YR button you
will get $4,911,256. Either way the answer is clear. The difference is that when you calculate the
I/YR, the calculator takes the interest rate out to nine decimal places. If you enter in the 2.8846,
then the calculator only takes the interest rate to four decimal places.
Assume a client and investment professional have worked together for several years. Recently,
the client's personal and financial circumstances have changed. According to the course
materials, what is the next asset management step that the investment professional should take?
